<PAGE>

--------------------------------------------------------------------------------
                                                                     Exhibit 4.2



                     GRUPO INDUSTRIAL DURANGO, S.A. de C.V.


                                       TO


                            THE CHASE MANHATTAN BANK,
                                   as Trustee







                                    Indenture


                            Dated as of July 25, 1996








                                  $250,000,000


                              125/8% Notes due 2003





--------------------------------------------------------------------------------
<PAGE>

<TABLE>

                                                             TABLE OF CONTENTS
                                                             -----------------

<CAPTION>
                                                                                                                Page
                                                                                                                ----



                                                                                                              <c>
PARTIES...........................................................................................................1


RECITALS OF THE COMPANY  1


ARTICLE ONE  DEFINITIONS AND OTHER
             PROVISIONS OF GENERAL APPLICATION....................................................................1

         SECTION 101.  Definitions 1
         SECTION 102.  Compliance Certificates and Opinions......................................................15
         SECTION 103.  Form of Documents Delivered to Trustee....................................................16
         SECTION 104.  Acts of Holders; Record Dates.............................................................16
         SECTION 105.  Notices, Etc., to Trustee and Company.....................................................17
         SECTION 106.  Notice to Holders; Waiver.................................................................17
         SECTION 107.  Conflict with Trust Indenture Act.........................................................18
         SECTION 108.  Effect of Headings and Table of Contents..................................................18
         SECTION 109.  Successors and Assigns....................................................................18
         SECTION 110.  Separability Clause.......................................................................18
         SECTION 111.  Benefits of Indenture.....................................................................18
         SECTION 112.  Governing Law.............................................................................18
         SECTION 113.  Legal Holidays............................................................................18
         SECTION 114.  Consent to Service; Jurisdiction..........................................................19
         SECTION 115.  Language of Notices, Etc..................................................................19

ARTICLE TWO   SECURITY FORMS.....................................................................................19

         SECTION 201.  Forms Generally...........................................................................19
         SECTION 202.  Form of Face of Security..................................................................20
         SECTION 203.  Form of Reverse of Security...............................................................22
         SECTION 204.  Form of Trustee's Certificate of Authentication...........................................27
         SECTION 205.  Book-Entry Notes..........................................................................27

ARTICLE THREE   THE SECURITIES...................................................................................29

         SECTION 301.  Title and Terms...........................................................................29
         SECTION 302.  Denominations.............................................................................29
         SECTION 303.  Execution, Authentication, Delivery and Dating............................................30
         SECTION 304.  Temporary Securities......................................................................30
         SECTION 305.  Registration of Transfer and Exchange.....................................................30
         SECTION 306.  Mutilated, Destroyed, Lost and Stolen Securities..........................................31
         SECTION 307.  Payment of Interest; Interest Rights Preserved............................................32
         SECTION 308.  Persons Deemed Owners.....................................................................33
</TABLE>

                                      (ii)
<PAGE>

<TABLE>
         
                                                                                                     <c>
         SECTION 309.  Cancellation..............................................................................33
         SECTION 310.  Computation of Interest...................................................................33
         SECTION 311.  CUSIP Numbers.............................................................................34

ARTICLE FOUR   SATISFACTION AND DISCHARGE........................................................................34

         SECTION 401.  Satisfaction and Discharge of Indenture...................................................34
         SECTION 402.  Application of Trust Money................................................................35

ARTICLE FIVE   REMEDIES  35

         SECTION 501.  Events of Default.........................................................................35
         SECTION 502.  Acceleration of Maturity; Rescission and Annulment........................................37
         SECTION 503.  Collection of Indebtedness and Suits for Enforcement by Trustee...........................38
         SECTION 504.  Trustee May File Proofs of Claim..........................................................39
         SECTION 505.  Trustee May Enforce Claims Without Possession of Securities...............................39
         SECTION 506.  Application of Money Collected............................................................39
         SECTION 507.  Limitation on Suits.......................................................................39
         SECTION 508.  Unconditional Right of Holders to Receive Principal and Interest..........................40
         SECTION 509.  Restoration of Rights and Remedies........................................................40
         SECTION 510.  Rights and Remedies Cumulative............................................................40
         SECTION 511.  Delay or Omission Not Waiver..............................................................41
         SECTION 512.  Control by Holders........................................................................41
         SECTION 513.  Waiver of Past Defaults...................................................................41
         SECTION 514.  Undertaking for Costs.....................................................................41
         SECTION 515.  Waiver of Stay or Extension Laws..........................................................42

ARTICLE SIX   THE TRUSTEE  42

         SECTION 601.  Certain Duties and Responsibilities.......................................................42
         SECTION 602.  Notice of Defaults........................................................................42
         SECTION 603.  Certain Rights of Trustee.................................................................42
         SECTION 604.  Not Responsible for Recitals or Issuance of Securities....................................43
         SECTION 605.  May Hold Securities.......................................................................43
         SECTION 606.  Money Held in Trust.......................................................................44
         SECTION 607.  Compensation and Reimbursement............................................................44
         SECTION 608.  Disqualification:  Conflicting Interest...................................................44
         SECTION 609.  Corporate Trustee Required; Eligibility...................................................44
         SECTION 610.  Resignation and Removal; Appointment of Successor.........................................45
         SECTION 611.  Acceptance of Appointment by Successor....................................................46
         SECTION 612.  Merger, Conversion, Consolidation or Succession to Business...............................46
         SECTION 613.  Preferential Collection of Claims Against Company.........................................46

ARTICLE SEVEN   HOLDERS' LISTS AND REPORTS
                BY TRUSTEE AND COMPANY...........................................................................47

         SECTION 701.  Company to Furnish Trustee Names and Addresses of Holders.................................47
         SECTION 702.  Preservation of Information; Communications to Holders....................................47
</TABLE>

                                     (iii)
<PAGE>

<TABLE>
         
                                                                                                     <c>
         SECTION 703.  Reports by Trustee........................................................................47
         SECTION 704.  Reports by Company........................................................................48

ARTICLE EIGHT   CONSOLIDATION, MERGER,
                CONVEYANCE, TRANSFER OR LEASE....................................................................48

         SECTION 801.  Company May Consolidate, Etc., Only on Certain Terms......................................48
         SECTION 802.  Successor Substituted.....................................................................50

ARTICLE NINE   SUPPLEMENTAL INDENTURES...........................................................................50

         SECTION 901.  Supplemental Indentures Without Consent of Holders........................................50
         SECTION 902.  Supplemental Indentures with Consent of Holders...........................................51
         SECTION 903.  Execution of Supplemental Indentures......................................................51
         SECTION 904.  Effect of Supplemental Indentures.........................................................52
         SECTION 905.  Conformity with Trust Indenture Act.......................................................52
         SECTION 906.  Reference in Securities to Supplemental Indentures........................................52
         SECTION 907.  Notice of Supplemental Indentures.........................................................52

ARTICLE TEN   COVENANTS  52

         SECTION 1001.  Payment of Principal and Interest........................................................52
         SECTION 1002.  Maintenance of Office or Agency..........................................................52
         SECTION 1003.  Money for Security Payments to Be Held in Trust..........................................53
         SECTION 1004.  Statement by Officers as to Default......................................................54
         SECTION 1005.  Existence  54
         SECTION 1006.  Maintenance of Properties................................................................54
         SECTION 1007.  Payment of Taxes and Other Claims........................................................54
         SECTION 1008.  Limitation on Indebtedness...............................................................54
         SECTION 1009.  Limitation on Restricted Payments........................................................56
         SECTION 1010.  Limitation on Dividend and Other Payment Restrictions Affecting Subsidiaries.............57
         SECTION 1011.  Limitation on the Issuance of Capital Stock and Indebtedness of Subsidiaries.............58
         SECTION 1012.  Limitation on Transactions with Affiliates...............................................58
         SECTION 1013.  Limitation on Liens......................................................................59
         SECTION 1014.  Limitation on Sale and Leaseback Transactions............................................60
         SECTION 1015.  Limitation on Asset Sales................................................................60
         SECTION 1016.  Change of Control........................................................................62
         SECTION 1017.  Indemnification of Judgment Currency.....................................................63
         SECTION 1018.  Payment of Additional Amounts............................................................63
         SECTION 1019.  Provision of Financial Information.......................................................66
         SECTION 1020.  Waiver of Certain Covenants..............................................................66

ARTICLE ELEVEN   REDEMPTION OF SECURITIES........................................................................67

         SECTION 1101.  Right of Redemption......................................................................67
         SECTION 1102.  Election to Redeem; Notice to Trustee....................................................67
</TABLE>

                                      (iv)
<PAGE>

<TABLE>
         
                                                                                                     <c>
         SECTION 1103.  Notice of Redemption.....................................................................68
         SECTION 1104.  Deposit of Redemption Price..............................................................68
         SECTION 1105.  Securities Payable on Redemption Date....................................................68

ARTICLE TWELVE   DEFEASANCE AND COVENANT DEFEASANCE..............................................................69

         SECTION 1201.  Company's Option to Effect Defeasance or Covenant Defeasance.............................69
         SECTION 1202.  Defeasance and Discharge.................................................................69
         SECTION 1203.  Covenant Defeasance......................................................................69
         SECTION 1204.  Conditions to Defeasance or Covenant Defeasance..........................................70
         SECTION 1205.  Deposited Money and U.S. Government Obligations to Be Held in Trust, Other
                        Miscellaneous Provisions.................................................................71
         SECTION 1206.  Reinstatement............................................................................72
</TABLE>


TESTIMONIUM
SIGNATURES AND SEALS
SCHEDULE A
<PAGE>

                                  Certain Sections of this Indenture relating to
                                         Sections 310 through 318 of the
                                           Trust Indenture Act of 1939:

<TABLE>
<CAPTION>
        Trust Indenture                                                                           Indenture
          Act Section                                                                              Section
          -----------                                                                              -------
<S>               <C>                                                                    <C>
   ss. 310        (a)(1)         ......................................................              609
                  (a)(2)         ......................................................              609
                  (a)(3)         ......................................................         Not Applicable
                  (a)(4)         ......................................................         Not Applicable
                  (b)            ......................................................              608
                                                                                         ----------------------------
                                                                                                     610
   ss. 311        (a)            ......................................................              613
                  (b)            ......................................................              613
   ss. 312        (a)            ......................................................              701
                                                                                                     702(a)
                  (b)            ......................................................              702(b)
                  (c)            ......................................................              702(c)
   ss. 313        (a)            ......................................................              703(a)
                  (a)(4)         ......................................................              101
                                                                                                     1004
                  (b)            ......................................................              703(a)
                  (c)            ......................................................              703(a)
                  (d)            ......................................................              703(b)
   ss. 314        (a)            ......................................................              704
                  (b)            ......................................................         Not Applicable
                  (c)(1)         ......................................................              102
                  (c)(2)         ......................................................              102
                  (c)(3)         ......................................................         Not Applicable
                  (d)            ......................................................         Not Applicable
                  (e)            ......................................................              102
   ss. 315        (a)            ......................................................              601
                  (b)            ......................................................              602
                  (c)            ......................................................              601
                  (d)            ......................................................              601
                  (e)            ......................................................              514
   ss. 316        (a)            ......................................................              101
                  (a)(1)(A)      ......................................................              502
                                                                                                     512
                  (a)(1)(B)      ......................................................              513
                  (a)(2)         ......................................................         Not Applicable
                  (b)            ......................................................              508

</TABLE>
<PAGE>

<TABLE>
<CAPTION>

        Trust Indenture                                                                           Indenture
          Act Section                                                                              Section
          -----------                                                                              -------

<S>               <C>                                                                          <C>
                  (c)            ......................................................              104(c)
   ss. 317        (a)(1)         ......................................................              503
                  (a)(2)         ......................................................              504
                  (b)            ......................................................              1003
   ss. 318        (a)            ......................................................              107

</TABLE>



Note:  This  reconciliation and tie shall not, for any purpose,  be deemed to be
       a part of the Indenture.
<PAGE>

                  INDENTURE, dated as of July 25, 1996, between GRUPO INDUSTRIAL
DURANGO,  S.A. de C.V., a corporation duly organized and existing under the laws
of the United Mexican States (herein called the "Company"), having its principal
office at Potasio 150,  Ciudad  Industrial,  Durango,  Durango,  United  Mexican
States,  and THE CHASE MANHATTAN BANK, a banking  corporation duly organized and
existing under the laws of New York, as Trustee (herein called the "Trustee").


                             RECITALS OF THE COMPANY


                  The Company has duly  authorized  the  creation of an issue of
its 125/8% Notes due 2003 (herein called the  "Securities") of substantially the
tenor and amount  hereinafter set forth, and to provide therefor the Company has
duly authorized the execution and delivery of this Indenture.

                  All things necessary to make the Securities,  when executed by
the Company and  authenticated  and  delivered  hereunder and duly issued by the
Company,  the valid  obligations  of the Company,  and to make this  Indenture a
valid  agreement of the Company,  in accordance  with their and its terms,  have
been done.

                  NOW, THEREFORE, THIS INDENTURE WITNESSETH:


                  For and in  consideration  of the premises and the purchase of
the Securities by the Holders thereof,  it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities, as follows:


                                   ARTICLE ONE

                              DEFINITIONS AND OTHER
                        PROVISIONS OF GENERAL APPLICATION

                  SECTION 101. Definitions.  For all purposes of this Indenture,
except as otherwise expressly provided or unless the context otherwise requires:

                  (1) the  terms  defined  in  this  Article  have  the meanings
         assigned to  them in this Article and include the plural as well as the
         singular;

                  (2) all other terms used herein which are defined in the Trust
         Indenture  Act,  either  directly  or by  reference  therein,  have the
         meanings assigned to them therein;

                  (3) all accounting terms not otherwise defined herein have the
         meanings  assigned  to  them  in  accordance  with  generally  accepted
         accounting  principles  in  Mexico,  and,  except as  otherwise  herein
         expressly provided, the term "generally accepted accounting principles"
         with respect to any computation required or permitted hereunder
<PAGE>

         shall  mean  such  accounting   principles  as  are  generally accepted
         accepted in Mexico and consistently  applied by the Company at the date
         of such computation; and

                  (4) the words  "herein,"  "hereof" and  "hereunder"  and other
         words of similar  import refer to this  Indenture as a whole and not to
         any particular Article, Section or other subdivision.

                  "Acquired   Indebtedness"   means  Indebtedness  of  a  Person
existing at the time such Person  became a Subsidiary  or assumed in  connection
with the  acquisition  of assets from such Person and not Incurred in connection
with, or in  contemplation  of, such Person becoming a Subsidiary or such assets
being acquired.

                  "Act," when used with  respect to any Holder,  has the meaning
specified in Section 104.

                  "Additional  Amounts"  has the  meaning  specified  in Section
1018.

                  "Adjusted  Consolidated  Assets"  means  the  total  amount of
assets  of the  Company  and its  Subsidiaries  (less  applicable  depreciation,
amortization  and other  valuation  reserves),  after  deducting  therefrom  all
current liabilities of the Company and its Subsidiaries, all as set forth on the
most  recently  available  consolidated  balance  sheet of the  Company  and its
Subsidiaries, prepared in conformity with Mexican GAAP.

                  "Adjusted  Consolidated Net Income" means, for any period, the
aggregate net income (or loss) of any Person and its  consolidated  Subsidiaries
for such period  determined in conformity  with Mexican GAAP;  provided that the
following items will be excluded in computing  Adjusted  Consolidated Net Income
(without duplication):  (i) the net income (or loss) of any Person that is not a
Subsidiary  of such  Person,  except to the extent of the amount of dividends or
other  distributions  actually paid to such Person or any of its Subsidiaries by
such  other  Person  during  such  period,  (ii)  solely  for  the  purposes  of
calculating  the amount of  Restricted  Payments  that may be made  pursuant  to
clause (3) of the first paragraph of Section 1009 (and, in such case,  except to
the extent  includible  pursuant to the  foregoing  clause (i)  above),  the net
income  (or  loss)  of such  Person  accrued  prior  to the  date it  becomes  a
Subsidiary of any other Person or is merged into or consolidated with such other
Person or any of its  Subsidiaries or all or  substantially  all of the property
and  assets of such  Person  are  acquired  by such  other  Person or any of its
Subsidiaries, (iii) the net income (or loss) of any Subsidiary of such Person to
the extent that the declaration or payment of dividends or similar distributions
by such  Subsidiary  of such  net  income  is not at the time  permitted  by the
operation of the terms of its charter or any  agreement,  instrument,  judgment,
decree,  order,   statute,   rule  or  governmental   regulation  and  (iv)  all
extraordinary gains and extraordinary losses.

                  "ADS"  means an American  Depositary  Share  representing  two
CPOs.

                  "Affiliate" of any specified Person means any other Person (i)
which directly or indirectly through one or more intermediaries  controls, or is
controlled by, or is under common control with, such specified  Person,  or (ii)
which beneficially owns or holds directly or indirectly

                                      -2-
<PAGE>

5% or more of any class of the Voting Stock of such  specified  Person or of any
Subsidiary  of such  specified  Person.  For the  purposes  of this  definition,
"control,"  when used with respect to any specified  person,  means the power to
direct the  management  and  policies  of such Person  directly  or  indirectly,
whether through the ownership of Voting Stock, by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the foregoing.

                  "Asset  Acquisition" means (i) an investment by the Company or
any of its  Subsidiaries  in any other Person pursuant to which such Person will
become a Subsidiary of the Company or any of its  Subsidiaries or will be merged
into or  consolidated  with the  Company or any of its  Subsidiaries  or (ii) an
acquisition  by the  Company  or any of its  Subsidiaries  of the  assets of any
Person  other  than  the  Company  or any of its  Subsidiaries  that  constitute
substantially all of a division or line of business of such Person.

                  "Asset Disposition" means the sale or other disposition by the
Company  or any of its  Subsidiaries  (other  than  to the  Company  or  another
Subsidiary of the Company) of (i) all or substantially  all of the Capital Stock
of any Subsidiary of the Company or (ii) all or substantially  all of the assets
that  constitute  a division  or line of  business  of the Company or any of its
Subsidiaries.

                  "Asset  Sale"  means  with  respect to any  Person,  any sale,
transfer or other disposition (including by way of merger, consolidation or Sale
and Leaseback  Transaction not involving a Capitalized Lease) in one transaction
or a series of related transactions by such Person or any of its Subsidiaries to
any Person  (other than such Person or any of its  Subsidiaries  in the ordinary
course of business) of (i) all or any of the Capital Stock of any  Subsidiary of
such Person,  (ii) all or substantially  all of the assets of a division or line
of business of such Person or any of its  Subsidiaries or (iii) any other assets
of such  Person  or any of its  Subsidiaries  outside  the  ordinary  course  of
business  of such  Person or such  Subsidiary  and,  in each  case,  that is not
governed by the provisions of Article VIII.

                  "Attributable  Indebtedness"  means,  when used in  connection
with a Sale and Leaseback  Transaction  referred to in Section 1014, at any date
of  determination,  the  product  of (i) the net  proceeds  from  such  Sale and
Leaseback Transaction and (ii) a fraction,  the numerator of which is the number
of full years of the term of the lease relating to the property involved in such
Sale and Leaseback Transaction (without regard to any options to renew or extend
such  term)  remaining  at the date of the  making of such  computation  and the
denominator  of  which is the  number  of full  years of the term of such  lease
(without  regard to any options to renew or extend such term)  measured from the
first day of such term.

                  "Board of  Directors"  means  either the board of directors of
the Company or any duly authorized committee of that board.

                  "Board  Resolution" means a copy of a resolution  certified by
the Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.

                                      -3-
<PAGE>

                  "Business  Day"  means any day  except a  Saturday,  Sunday or
other day on which banking  institutions  in Durango,  Mexico or The City of New
York are authorized or obligated by law or executive order to close.

                  "Capital Stock" means, with respect to any Person, any and all
shares,  interests,  participations  or other equivalents  (however  designated,
whether  voting or  non-voting)  of such  Person's  capital  stock,  whether now
outstanding or issued after the date hereof, including,  without limitation, all
Common Stock and Preferred Stock.

                  "Capitalized Lease" means, as applied to any Person, any lease
of any  property  (whether  real,  personal  or mixed)  of which the  discounted
present value of the rental  obligations of such Person as lessee, in conformity
with Mexican  GAAP, is required to be  capitalized  on the balance sheet of such
Person;  and  "Capitalized  Lease  Obligation" is defined to mean the discounted
present value of the rental obligations, as aforesaid, under such lease.

                  "Change of Control" has the meaning specified in Section 1016.

                  "Code" is defined to mean the United States  Internal  Revenue
Code of 1986, as amended.

                  "Commission" means the Securities and Exchange Commission,  as
from time to time  constituted,  created  under the  Securities  Exchange Act of
1934, or, if at any time after the execution of this  instrument such Commission
is not  existing  and  performing  the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties at such time.

                  "Common  Stock"  of any  Person  means  Capital  Stock of such
Person that does not rank prior,  as to the  payment of  dividends  or as to the
distribution   of  assets  upon  any  voluntary  or   involuntary   liquidation,
dissolution  or winding  up of such  Person,  to shares of Capital  Stock of any
other class of such Person.

                  "Company" means the Person named as the "Company" in the first
paragraph  of this  instrument  until a successor  Person shall have become such
pursuant  to  the  applicable  provisions  of  this  Indenture,  and  thereafter
"Company" shall mean such successor Person.

                  "Company  Request" or "Company  Order" means a written request
or order signed in the name of the Company by the Chairman of the Board,  a Vice
Chairman  of the Board,  the  President  or a Vice  President,  and by the Chief
Financial Officer, the Comptroller, the Treasurer or an Assistant Treasurer, the
Secretary or an Assistant Secretary, and delivered to the Trustee.

                  "Consolidated  EBITDA"  means,  with respect to any Person for
any period, the sum of the amounts for such period of (i) Adjusted  Consolidated
Net Income, (ii) Consolidated  Interest Expense,  (iii) income taxes (other than
income taxes (either  positive or negative)  attributable to  extraordinary  and
non-recurring  gains or losses or sales of assets),  (iv) depreciation  expense,
(v)  amortization  expense and (vi) all other non-cash  items reducing  Adjusted
Consolidated   Net  Income,   less  all  non-cash  items   increasing   Adjusted
Consolidated  Net Income,  all as  determined on a  consolidated  basis for such
Person and its Subsidiaries in conformity with Mexican GAAP.

                                      -4-
<PAGE>

                  "Consolidated  Interest  Expense"  means,  with respect to any
Person  for  any  period,  the  aggregate  amount  of  interest  in  respect  of
Indebtedness   (including   amortization  of  original  issue  discount  on  any
Indebtedness  and the  interest  portion  of any  deferred  payment  obligation,
calculated in accordance with the effective  interest method of accounting;  all
commissions,  discounts  and other fees and charges owed with respect to letters
of credit and bankers' acceptance  financing;  and the net costs associated with
Interest  Rate  Agreements)  and all but the  principal  component of rentals in
respect of Capitalized Lease  Obligations paid,  accrued or scheduled to be paid
or to be accrued by such Person and its  consolidated  Subsidiaries  during such
period;  excluding,  however,  any amount of such interest of any  Subsidiary of
such  Person if the net income (or loss) of such  Subsidiary  is excluded in the
calculation  of Adjusted  Consolidated  Net Income for such  Person  pursuant to
clause (iii) of the definition  thereof (but only in the same  proportion as the
net income (or loss) of such  Subsidiary  is excluded  from the  calculation  of
Adjusted Consolidated Net Income for such Person pursuant to clause (iii) of the
definition thereof).

                  "Consolidated  Tangible  Net  Worth" of any  Person  means the
stockholders'  equity of such  Person,  determined  on a  consolidated  basis in
accordance with Mexican GAAP, less (i) amounts  attributable to Redeemable Stock
of such Person and (ii) amounts attributable to deferred charges; provided that,
with respect to the Company, adjustments following the date of this Indenture to
the accounting  books and records of the Company in accordance  with the Mexican
counterparts  for  Accounting  Principles  Board  Opinions  Nos.  16  and 17 (or
successor  opinions  thereto) or otherwise  resulting  from the  acquisition  of
Control of the Company by another Person will not be given effect.

                  "Corporate  Trust Office"  means the  principal  office of the
Trustee in The City of New York at which at any  particular  time its  corporate
trust  business  shall be  administered,  which at the  date  hereof  is 4 Chase
MetroTech Center, Brooklyn, NY 11245, or such other office as shall be specified
in writing.

                  "corporation"  means   a  corporation,  association,  company,
 joint-stock company or business trust.

                  "Covenant  Defeasance"  shall have the  meaning  specified  in
Section 1203.

                  "CPO" means an ordinary  participation  certificate  issued by
the CPO Trust.

                  "CPO Trust" means that certain trust  created  pursuant to the
Trust Agreement,  dated November 24, 1989, by Nafinsa, S.N.C., as grantor and as
the CPO Trustee, which will hold Series A Shares and which will issue CPOs.

                  "CPO Trustee" means  Nafinsa,  S.N.C.,  or its  successor,  as
Trustee under the Trust Agreement, dated November 24, 1989.

                  "Currency  Agreement"  means any  foreign  exchange  contract,
currency swap  agreement or other similar  agreement or  arrangement  reasonably
designed to protect the Company or any of its Subsidiaries  against fluctuations
in currency values to or under which the

                                      -5-
<PAGE>

                  Company or any of its Subsidiaries is a party or a beneficiary
on the Issue Date or becomes a party or a beneficiary thereafter.

                  "Defaulted Interest" has the meaning specified in Section 307.

                  "Defeasance" shall have the meaning specified in Section 1202.

                  "Employee  Stock  Option  Trust"  means the trust  established
under the trust  agreement  dated  June 9,  1994,  which  pursuant  thereto  may
purchase  Series A Shares from time to time for the benefit of the  officers and
employees of the Company.

                  "Event of Default" has the meaning specified in Section 501.

                  "Excess Proceeds" has the meaning specified in Section 1015.

                  "Excess Proceeds Payment" has the meaning specified in Section
1015.

                  "Exchange Act" means the United States Securities Exchange Act
of 1934, as amended.

                  "Expiration  Date"  shall have the  meaning  specified  in the
definition of "Offer to Purchase."

                  "Group" has the meaning specified in Section 1016.

                  "Guarantee" means any obligation,  contingent or otherwise, of
any  Person  directly  or  indirectly  guaranteeing  any  Indebtedness  or other
obligation  of any other  Person and,  without  limiting the  generality  of the
foregoing, any obligation,  direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or  advance or supply  funds for the  purchase or
payment of) such  Indebtedness or other obligation of such other Person (whether
arising by virtue of partnership arrangements,  or by agreement to keep-well, to
purchase assets, goods,  securities or services, to take-or-pay,  or to maintain
financial  statement  conditions or otherwise) or (ii) entered into for purposes
of  assuring  in any other  manner  the  obligee of such  Indebtedness  or other
obligation  of the payment  thereof or to protect such  obligee  against loss in
respect thereof (in whole or in part);  provided that the term  "Guarantee" will
not include  endorsements  for  collection or deposit in the ordinary  course of
business;  and the term  "Guaranteed"  will  have a meaning  correlative  to the
foregoing.

                  "Holder" means the registered holder of a Security.

                  "Incur"  means,  with  respect  to any  Indebtedness  or other
obligation of any Person, to create,  issue,  incur (by conversion,  exchange or
otherwise),  assume,  guarantee  or otherwise  become  liable in respect of such
Indebtedness  or other  obligation  or the  recording,  as required  pursuant to
Mexican GAAP or otherwise,  of any such  Indebtedness or other obligation on the
balance sheet of such Person (and  "Incurrence,"  "Incurred,"  "Incurrable," and
"Incurring" have meanings correlative to the foregoing); provided, however, that
a change in Mexican GAAP that

                                      -6-
<PAGE>

results  in an  obligation  of such  Person  that  exists at such time  becoming
Indebtedness will not be deemed an Incurrence of such Indebtedness.

                  "Indebtedness"  means,  with respect to any Person at any date
of determination (without duplication),  (i) all indebtedness of such Person for
borrowed  money,  (ii)  all  obligations  of such  Person  evidenced  by  bonds,
debentures,  notes or other similar  instruments,  (iii) all obligations of such
Person in respect of letters of credit or other similar  instruments  (including
reimbursement  obligations with respect  thereto),  (iv) all obligations of such
Person to pay the  deferred and unpaid  purchase  price of property or services,
which  purchase price is due more than six months after the date of placing such
property in service or taking  delivery and title  thereto or the  completion of
such services,  (v) all  obligations of such Person as lessee under  Capitalized
Leases, (vi) all Indebtedness of other Persons secured by a Lien on any asset of
such  Person,  whether  or not such  Indebtedness  is  assumed  by such  Person;
provided that the amount of such Indebtedness will be the lesser of (a) the fair
market value of such asset at such date of  determination  and (b) the amount of
such Indebtedness of such other Persons, (vii) all Indebtedness of other Persons
Guaranteed by such Person to the extent such  Indebtedness is Guaranteed by such
Person,  (viii) the Securities and any Guarantees thereof and (ix) to the extent
not otherwise included in this definition, obligations under Currency Agreements
and Interest Rate  Agreements.  The amount of  Indebtedness of any Person at any
date  will  be the  outstanding  balance  at  such  date  of  all  unconditional
obligations as described above and the maximum liability, upon the occurrence of
the contingency giving rise to the obligation,  of any contingent obligations at
such date;  provided that the amount outstanding at any time of any Indebtedness
issued with original issue discount is the face amount of such Indebtedness less
the  remaining  unamortized  portion  of the  original  issue  discount  of such
Indebtedness at such time as determined in conformity with Mexican GAAP.

                  "Indenture" means this instrument as originally executed or as
it may from time to time be  supplemented  or amended by one or more  indentures
supplemental  hereto entered into pursuant to the applicable  provisions hereof,
including,  for all  purposes  of this  instrument  and  any  such  supplemental
indenture,  the  provisions  of the Trust  Indenture Act that are deemed to be a
part  of and  govern  this  instrument  and  any  such  supplemental  indenture,
respectively.

                  "Interest Coverage Ratio" means, with respect to any Person on
any  Transaction  Date,  the ratio of (i) the aggregate  amount of  Consolidated
EBITDA  of  such  Person  for the  four  fiscal  quarters  for  which  financial
information  in  respect  thereof  is  available   immediately   prior  to  such
Transaction  Date to (ii) the aggregate  Consolidated  Interest  Expense of such
Person during such four fiscal  quarters.  In making the foregoing  calculation,
(a) pro forma effect will be given to (1) any Indebtedness  Incurred  subsequent
to the end of the four-fiscal-quarter period referred to in clause (i) and prior
to the Transaction Date, (2) any Indebtedness Incurred during such period to the
extent such  Indebtedness  is  outstanding at the  Transaction  Date and (3) any
Indebtedness  to be Incurred on the  Transaction  Date,  in each case as if such
Indebtedness  had been  Incurred  on the first  day of such  four-fiscal-quarter
period and after giving effect to the application of the proceeds  thereof;  (b)
Consolidated  Interest  Expense  attributable  to interest  on any  Indebtedness
(whether existing or being Incurred) computed on a pro forma basis and bearing a
floating  interest rate will be computed as if the rate in effect on the date of
computation (taking into account any Interest Rate Agreement  applicable to such
Indebtedness if such Interest Rate

                                      -7-
<PAGE>

Agreement has a remaining  term in excess of 12 months) had been the  applicable
rate for the  entire  period;  (c)  there  will be  excluded  from  Consolidated
Interest  Expense any  Consolidated  Interest  Expense  related to any amount of
Indebtedness  that was  outstanding  during such  four-fiscal-quarter  period or
thereafter  but that is not  outstanding  or is to be repaid on the  Transaction
Date;  (d) pro  forma  effect  will be  given to Asset  Dispositions  and  Asset
Acquisitions that occur during such four-fiscal-quarter period or thereafter and
prior to the Transaction  Date (including any Asset  Acquisition to be made with
the Indebtedness  Incurred pursuant to clause (a) above) as if they had occurred
on the first day of such  four-fiscal-quarter  period;  and (e) pro forma effect
will be given to asset  dispositions and asset  acquisitions that have been made
by any Person  that has become a  Subsidiary  of the  Company or has been merged
with  or  into  the  Company  or  any  Subsidiary  of  the  Company  during  the
four-fiscal-quarter  period  referred to above or  subsequent to such period and
prior to the  Transaction  Date and that would have been Asset  Dispositions  or
Asset  Acquisitions  had such  transactions  occurred  when  such  Person  was a
Subsidiary of the Company as if such asset  dispositions  or asset  acquisitions
were Asset  Dispositions or Asset Acquisitions that occurred on the first day of
such period.

                  "Interest  Payment  Date"  means  the  Stated  Maturity  of an
installment of interest on the Securities.

                  "Interest Rate  Agreement"  means any interest rate protection
agreement,  interest  rate future  agreement,  interest  rate option  agreement,
interest rate swap agreement,  interest rate cap agreement, interest rate collar
agreement,   interest  rate  hedge  agreement  or  other  similar  agreement  or
arrangement   reasonably   designed  to  protect  the  Company  or  any  of  its
Subsidiaries  against  fluctuations  in  interest  rates to or under  which  the
Company  or any of its  Subsidiaries  is a party  or a  beneficiary  on the date
hereof or becomes a party or a beneficiary hereafter.

                  "Investment"  means any direct or indirect advance (other than
advances to customers in the  ordinary  course of business  that are recorded as
accounts  receivable  on the balance  sheet of any Person or its  Subsidiaries),
loan or other  extension of credit or capital  contribution  to (by means of any
transfer of cash or other  property  to others or any  payment  for  property or
services for the account or use of others),  or any purchase or  acquisition  of
Capital Stock, bonds, notes,  debentures or other similar instruments issued by,
any other Person.

                  "Issue  Date"  means  the date on  which  the  Securities  are
originally issued under this Indenture.

                  "Judgment Currency" has the meaning specified in Section 1017.

                  "Lien"  with  respect  to any  property  or  assets  means any
mortgage  or  deed  of  trust,  pledge,   hypothecation,   assignment,   deposit
arrangement,  security interest, lien, charge, easement (other than any easement
not materially impairing usefulness or marketability),  encumbrance, preference,
priority or other security agreement or preferential  arrangement of any kind or
nature  whatsoever  on or with  respect to such  property or assets  (including,
without  limitation,  any conditional  sale or other title  retention  agreement
having substantially the same economic effect as any of the foregoing).

                                      -8-
<PAGE>

                  "Management  Stockholders"  means   Ing.  Miguel  Rincon,  Dr.
Jose A. Rincon and Sr. Jesus Rincon and members of their immediate families.

                  "Maturity," when used with respect to any Security,  means the
date on which the principal of such Security  becomes due and payable as therein
or  herein  provided,  whether  at the  Stated  Maturity  or by  declaration  of
acceleration, call for redemption or otherwise.

                  "Mexican GAAP" means accounting  principles generally accepted
in Mexico,  including  accounting  principles  which  account for the effects of
inflation as provided for under  Bulletin  B-10  "Recognition  of the Effects of
Inflation  on the  Financial  Information,"  as  amended,  issued by the Mexican
Institute of Public Accountants.

                  "Net Cash Proceeds" means, with respect to any Asset Sale, the
proceeds of such Asset Sale in the form of cash or cash  equivalents,  including
payments in respect of deferred payment obligations (to the extent corresponding
to the principal, but not interest, component thereof) when received in the form
of cash or cash equivalents  (except to the extent such obligations are financed
or sold with  recourse  to the Company or any  Subsidiary  of the  Company)  and
proceeds from the conversion of other  property  received when converted to cash
or cash  equivalents,  net of (i)  brokerage  commissions  and  other  fees  and
expenses (including fees and expenses of counsel and investment bankers) related
to such Asset Sale,  (ii)  provisions  for all taxes  (whether or not such taxes
will  actually be paid or are  payable)  as a result of such Asset Sale  without
regard  to the  consolidated  results  of  operations  of the  Company  and  its
Subsidiaries, taken as a whole, (iii) payments made to repay Indebtedness or any
other  obligation  outstanding at the time of such Asset Sale that either (a) is
secured by a Lien on the  property  or assets sold or (b) is required to be paid
as a result of such sale and (iv)  appropriate  amounts  to be  provided  by the
Company or any  Subsidiary of the Company as a reserve  against any  liabilities
associated  with such Asset Sale,  including,  without  limitation,  pension and
other post-employment benefit liabilities,  liabilities related to environmental
matters and liabilities under any  indemnification  obligations  associated with
such Asset Sale, all as determined in conformity with Mexican GAAP.

                  "1994 Yankee  Bonds" means the  Company's  12% Notes Due 2001,
issued under an indenture dated as of July 21, 1994.

                  "Non-Recourse   Indebtedness"  means  any  Indebtedness  of  a
Non-Recourse  Subsidiary  (i) in respect of which neither the Company nor any of
its Subsidiaries  (other than a Non-Recourse  Subsidiary) is liable or obligated
in  any  manner  including,  without  limitation,   liabilities  or  obligations
constituting  Indebtedness of the Company or any of its Subsidiaries (other than
a Non-Recourse Subsidiary) and (ii) the occurrence of any event or the existence
of any condition  under any agreement or instrument  relating to which shall not
at any time have the effect of accelerating,  or permitting the acceleration of,
the  maturity  of any  Indebtedness  of the  Company or any of its  Subsidiaries
(other  than  a  Non-Recourse  Subsidiary)  or  otherwise  permitting  any  such
Indebtedness  to be  declared  to be due and  payable,  or to be  required to be
prepaid, purchased or redeemed, prior to the stated maturity thereof.

                  "Non-Recourse Subsidiary" means a Subsidiary designated by the
Board of  Directors in a Board  Resolution  delivered to the Trustee that at the
time of such designation has

                                      -9-
<PAGE>

total  assets  of  $1,000 or less and that (i) owns  only  property  and  assets
acquired by such Subsidiary  after the Issue Date from a Person or Persons other
than the  Company  or any of its  Subsidiaries  or  Affiliates,  and (ii) has no
Indebtedness other than Non-Recourse Indebtedness.

                  "Offer" has the meaning  specified in the definition of "Offer
to Purchase."

                  "Offer  to  Purchase"  means  an  offer  by the  Company  (the
"Offer"),  which is set forth in a writing  sent by first  class  mail,  postage
prepaid,  to each Holder at the address of such Holder appearing in the Security
Register on the date of the Offer,  offering  to  purchase  up to the  principal
amount of Securities  specified in such Offer at the purchase price specified in
such Offer (as determined pursuant to the provisions  hereof).  Unless otherwise
required by  applicable  law,  the Offer will  specify an  expiration  date (the
"Expiration  Date") of the  Offer to  Purchase  which  will be,  subject  to any
contrary  requirements  of applicable law, not less than 30 days or more than 60
days after the date of such Offer and a settlement  date (the  "Purchase  Date")
for the purchase of Securities  within five  Business Days after the  Expiration
Date.  The Company  will  notify the Trustee at least 15 Business  Days (or such
shorter  period as is  acceptable  to the  Trustee)  prior to the mailing of the
Offer of the Company's  obligation  to make an Offer to Purchase,  and the Offer
will be mailed by the Company or, at the  Company's  request,  by the Trustee in
the name and at the expense of the Company.  The Offer will contain  information
concerning the business of the Company and its Subsidiaries which the Company in
good faith  believes will enable such Holders to make an informed  decision with
respect to the Offer to Purchase  (which at a minimum  will include (i) the most
recent annual and quarterly  financial  statements and "Management's  Discussion
and Analysis of Financial Condition and Results of Operations"  contained in the
documents required to be filed pursuant to Section 1019 (which  requirements may
be  satisfied by delivery of such  documents  together  with the Offer),  (ii) a
description of material developments in the Company's business subsequent to the
date of the  latest of such  financial  statements  referred  to in  clause  (i)
(including a description  of the events  requiring the Company to make the Offer
to Purchase),  (iii) if applicable,  appropriate pro forma financial information
concerning  the Offer to Purchase and the events  requiring  the Company to make
the Offer to Purchase and (iv) any other information  required by applicable law
to be included  therein).  The Offer will contain all instructions and materials
necessary to enable such Holders to tender  Securities  pursuant to the Offer to
Purchase. The Offer will also state:

               (a) the Section of this Indenture  pursuant to which the Offer to
          Purchase is being made;

               (b) the Expiration Date and the Purchase Date;

               (c) the aggregate principal amount of the outstanding  Securities
          offered  to be  purchased  by the  Company  pursuant  to the  Offer to
          Purchase  (including,  if less than 100%, the manner by which such has
          been  determined  pursuant to the Section of this Indenture  requiring
          the Offer to Purchase) (the "Purchase Amount");

               (d) the purchase  price to be paid by the Company for each $1,000
          aggregate  principal  amount of  Securities  accepted for payment (the
          "Purchase Price");

                                      -10-
<PAGE>

               (e)  that  the  Holder  may  tender  all  or any  portion  of the
          Securities  registered in the name of such Holder and that any portion
          of a Security  tendered  must be tendered  in an integral  multiple of
          $1,000 principal amount;

               (f) the place or places where  Securities  are to be  surrendered
          for tender pursuant to the Offer to Purchase;

               (g) that  interest on any  Security  not tendered or tendered but
          not  purchased by the Company  pursuant to the Offer to Purchase  will
          continue to accrue;

               (h) that on the Purchase Date the Purchase  Price will become due
          and payable upon each  Security  accepted for payment  pursuant to the
          Offer to Purchase  and that  interest  thereon will cease to accrue on
          and after the Purchase Date;

               (i) that each Holder  electing  to tender a Security  pursuant to
          the Offer to Purchase  will be required to surrender  such Security at
          the  place or  places  specified  in the  Offer  prior to the close of
          business on the Expiration  Date (such Security  being, if the Company
          or the Trustee so  requires,  duly  endorsed by, or  accompanied  by a
          written instrument of transfer in form satisfactory to the Company and
          the Trustee duly  executed  by, the Holder  thereof or an attorney for
          the Holder duly authorized in writing);

               (j) that Holders of  Securities  will be entitled to withdraw all
          or any  portion of  Securities  tendered if the Company (or its Paying
          Agent)  receives,  not  later  than  the  close  of  business  on  the
          Expiration Date, a facsimile  transmission or letter setting forth the
          name of the Holder,  the  principal  amount of the Security the Holder
          tendered,  the certificate  number of the Security the Holder tendered
          and a statement  that such Holder is  withdrawing  all or a portion of
          the tender of such Holder;

               (k) that (i) if Securities in an aggregate  principal amount less
          than or  equal  to the  Purchase  Amount  are  duly  tendered  and not
          withdrawn pursuant to the Offer to Purchase, the Company will purchase
          all such  Securities and (ii) if Securities in an aggregate  principal
          amount in excess of the Purchase Amount are tendered and not withdrawn
          pursuant  to  the  Offer  to  Purchase,   the  Company  will  purchase
          Securities having an aggregate  principal amount equal to the Purchase
          Amount on a pro rata  basis  (with such  adjustments  as may be deemed
          appropriate  so that only  Securities  in  denominations  of $1,000 or
          integral multiples thereof will be purchased); and

               (1) that in case of any Holder whose  Security is purchased  only
          in part, the Company will execute,  and the Trustee will  authenticate
          and deliver to the Holder of such Security  without service charge,  a
          new  Security  or  Securities,   of  any  authorized  denomination  as
          requested by such Holder,  in an aggregate  principal  amount equal to
          and in  exchange  for  the  unpurchased  portion  of the  Security  so
          tendered.

                  "Officers'  Certificate"  means a  certificate  signed  by the
Chairman of the Board,  a Vice  Chairman of the Board,  the  President or a Vice
President, and by the Chief Financial Officer, the Comptroller, the Treasurer or
an Assistant Treasurer, the Secretary or an Assistant Secretary,

                                      -11-
<PAGE>

of the Company,  and  delivered to the Trustee.  One of the officers  signing an
Officers'  Certificate  given  pursuant to Section  1004 shall be the  principal
executive, financial or accounting officer of the Company.

                  "Opinion of  Mexican   Counsel"  means  a  written  opinion of
Mexican  counsel  admitted to practice in Mexico who shall be  acceptable to the
Trustee,  provided that such counsel may rely, as to any matters of U.S. law, on
an Opinion of U.S. Counsel.

                  "Opinion  of  U.S.   Counsel"  means  a  written   opinion  of
independent U.S. counsel admitted to practice in the State of New York who shall
be  acceptable  to the Trustee,  provided  that such counsel may rely, as to any
matters of Mexican law, on an Opinion of Mexican Counsel.

                  "Outstanding," when used with respect to Securities, means, as
of the date of  determination,  all  Securities  theretofore  authenticated  and
delivered under this Indenture, except:

                  (i)   Securities  theretofore  cancelled   by the  Trustee  or
         delivered  to the  Trustee  for cancellation;

                  (ii)  Securities for whose payment or redemption  money in the
         necessary amount has been theretofore deposited with the Trustee or any
         Paying  Agent  (other  than the  Company)  in trust  or set  aside  and
         segregated in trust by the Company (if the Company shall act as its own
         Paying  Agent) for the Holders of such  Securities;  provided  that, if
         such Securities are to be redeemed,  notice of such redemption has been
         duly  given   pursuant  to  this   Indenture  or   provision   therefor
         satisfactory to the Trustee has been made; and

                  (iii)  Securities which have been paid pursuant to Section 306
         or in  exchange  for or in lieu of which  other  Securities  have  been
         authenticated and delivered pursuant to this Indenture,  other than any
         such  Securities in respect of which there shall have been presented to
         the Trustee proof satisfactory to it that such Securities are held by a
         bona  fide   purchaser  in  whose  hands  such   Securities  are  valid
         obligations of the Company;

provided,  however,  that in  determining  whether the Holders of the  requisite
principal amount of the Outstanding  Securities have given any request,  demand,
authorization,  direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the  Securities or any Affiliate of the
Company  or of such  other  obligor  shall be  disregarded  and deemed not to be
Outstanding,  except that, in determining whether the Trustee shall be protected
in relying upon any such  request,  demand,  authorization,  direction,  notice,
consent or waiver,  only  Securities  which the Trustee  actually knows to be so
owned shall be so  disregarded.  Securities  so owned which have been pledged in
good faith may be regarded as  Outstanding  if the  pledgee  establishes  to the
satisfaction  of the Trustee the pledgee's  right so to act with respect to such
Securities and that the pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor.

                                      -12-
<PAGE>

                  "Paying  Agent" means any Person  authorized by the Company to
pay the  principal  of or interest on any  Securities  on behalf of the Company,
which shall initially be The Chase Manhattan Bank.

                  "Permitted  Business  Investment"  means any Investment by the
Company or a Subsidiary of the Company in another  Subsidiary or in an Affiliate
which  is an  Affiliate  solely  by  reason  of  being  directly  or  indirectly
controlled by the Company or such  Subsidiary and which is engaged in a business
similar to that of the Company and its Subsidiaries.

                  "Person" means any individual, corporation, partnership, joint
venture,  trust,  unincorporated  organization  or  government  or any agency or
political subdivision thereof.

                  "Predecessor  Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that evidenced
by such  particular  Security;  and,  for the purposes of this  definition,  any
Security  authenticated  and  delivered  under Section 306 in exchange for or in
lieu of a  mutilated,  destroyed,  lost or  stolen  Security  shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen security.

                  "Preferred Stock" means,  with respect to any Person,  any and
all shares, interests,  participations or other equivalents (however designated,
whether voting or non-voting)  of such Person's  preferred or preference  stock,
whether now  outstanding  or issued  after the date hereof,  including,  without
limitation, all series and classes of such preferred or preference stock.

                  "Purchase  Amount" has the meaning specified in the definition
of Offer to Purchase.

                  "Purchase Date" has the meaning specified in the definition of
Offer to Purchase.

                  "Purchase  Price" has the meaning  specified in the definition
of Offer to Purchase.

                  "Redeemable  Stock" of any Person means any equity security of
such Person that by its terms or otherwise  is required to be redeemed  prior to
the final Stated  Maturity of the  Securities  or is redeemable at the option of
the  holder  thereof  at any time  prior to the  final  Stated  Maturity  of the
Securities.

                  "Redemption  Date," when used with  respect to any Security to
be  redeemed,  means the date fixed for such  redemption  by or pursuant to this
Indenture-

                  "Redemption  Price," when used with respect to any Security to
be  redeemed,  means the price at which it is to be  redeemed  pursuant  to this
Indenture.

                  "Regular Record Date" for the interest payable on any Interest
Payment Date means the July 1 or January 1 (whether or not a Business  Day),  as
the case may be, next preceding such Interest Payment Date.

                                      -13-
<PAGE>

                  "Related  Person" of any Person  means any other  Person  that
owns, or any controlling Affiliate of any other Person that owns, (i) 5% or more
of the outstanding  Common Stock of such Person or (ii) 5% or more of the Voting
Stock of such Person.

                  "Required  Filing Dates" has the meaning  specified in Section
1019.

                  "Restricted  Payment"  has the  meaning  specified  in Section
1009.

                  "Sale  and  Leaseback  Transaction"  of any  Person  means  an
arrangement with any lender or investor or to which such lender or investor is a
party  providing for the leasing by such Person of any property or asset of such
Person which has been or is being sold or  transferred  by such Person more than
180 days after the  acquisition  thereof or the  completion of  construction  or
commencement of operation thereof to such lender or investor or to any person to
whom funds have been or are to be  advanced  by such  lender or  investor on the
security of such property or asset. The stated maturity of such arrangement will
be the date of the last  payment  of rent or any other  amount  due  under  such
arrangement  prior to the first date on which such arrangement may be terminated
by the lessee without payment of a penalty.

                  "Securities  Act" means the United  States  Securities  Act of
1933, as amended.

                  "Security   Register"  and  "Security   Registrar"   have  the
respective meanings specified in Section 305.

                  "Series A Shares" means the Company's  Series A common shares,
without par value.

                  "Special  Record  Date"  for  the  payment  of  any  Defaulted
Interest means a date fixed by the Trustee pursuant to Section 307.

                  "Spot rate of  exchange"  shall have the meaning  specified in
Section 1017.

                  "Stated  Maturity"  means,  when  used  with  respect  to  any
Security or any  installment  of interest  thereon,  the date  specified in such
Security  as the fixed  date on which the  principal  of such  Security  or such
installment of interest is due and payable.

                  "Subsidiary"   means,   with   respect  to  any  Person,   any
corporation,  association or other business entity of which more than 50% of the
outstanding  Voting Stock is owned,  directly or indirectly,  by such Person and
one or more other Subsidiaries of such Person.

                  "Substantially-Owned  Subsidiary"  means,  with respect to any
Person,  any  Subsidiary  of such Person if at least 95% of the Common  Stock or
other similar equity ownership  interests (but not including Preferred Stock) in
such Subsidiary (other than any directors'  qualifying shares) is owned directly
or indirectly by such Person.

                  "Successor  Company"  shall  have  the  meaning  specified  in
Section 801.

                                      -14-
<PAGE>

                  "Transaction  Date" means,  with respect to the  Incurrence of
any  Indebtedness  by the  Company  or any of its  Subsidiaries,  the date  such
Indebtedness is to be Incurred and, with respect to any Restricted Payment,  the
date such Restricted Payment is to be made.

                  "Trust Indenture Act" means the Trust Indenture Act of 1939 as
in force  at the  date as of  which  this  instrument  was  executed;  provided,
however, that in the event the Trust Indenture Act of 1939 is amended after such
date, "Trust Indenture Act" means, to the extent required by any such amendment,
the Trust Indenture Act of 1939 as so amended.

                  "Trustee" means the Person named as the "Trustee" in the first
paragraph of this  instrument  until a successor  Trustee shall have become such
pursuant  to  the  applicable  provisions  of  this  Indenture,  and  thereafter
"Trustee" shall mean such successor Trustee.

                  "Underwriting  Agreement"  means the  underwriting  agreement,
dated July 22,  1996  between the Company  and the  underwriters  named  therein
relating to the sale of the 126/8% Notes due 2003.

                  "Vice President," when used with respect to the Company or the
Trustee,  means any vice  president,  whether or not designated by a number or a
word or words added before or after the title "vice president."

                  "Voting  Stock"  means  Capital  Stock  of any  class  or kind
ordinarily  having  the  power  to vote for the  election  of  directors  of the
Company.

                  "Working  Capital  Facilities"  means a borrowing  facility or
facilities established for working capital purposes, as certified to the Trustee
in an Officers' Certificate, entered into after the Issue Date.

                  SECTION 102.  Compliance  Certificates and Opinions.  Upon any
application  or request by the Company to the  Trustee to take any action  under
any provision of this  Indenture,  the Company shall furnish to the Trustee such
certificates and opinions as may be required under the Trust Indenture Act. Each
such  certificate  or  opinion  shall  be  given  in the  form  of an  Officers'
Certificate,  if to be given by an  officer  of the  Company,  or an  opinion of
Mexican  Counsel  or an Opinion  of U.S.  Counsel,  as the case may be, if to be
given by counsel,  and shall comply with the requirements of the Trust Indenture
Act and any other requirement set forth in this Indenture.

                  Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include

                    (1)  a  statement   that  each   individual   signing   such
               certificate  or opinion has read such  covenant or condition  and
               the definitions herein relating thereto;

                    (2) a brief  statement  as to the  nature  and  scope of the
               examination  or  investigation   upon  which  the  statements  or
               opinions contained in such certificate or opinion are based;

                                      -15-
<PAGE>

                    (3)  a  statement   that,   in  the  opinion  of  each  such
               individual,  he has made such  examination or investigation as is
               necessary  to enable  him to express  an  informed  opinion as to
               whether or not such covenant or condition has been complied with;
               and

                    (4) a statement  as to whether,  in the opinion of each such
               individual, such condition or covenant has been complied with.

                  SECTION 103.  Form of Documents  Delivered to Trustee.  In any
case where  several  matters are required to be  certified  by, or covered by an
opinion of, any specified  Person,  it is not necessary that all such matters be
certified  by, or covered by the opinion of, only one such Person,  or that they
be so certified or covered by only one document, but one such Person may certify
or give an  opinion  with  respect  to some  matters  and one or more other such
Persons as to other matters,  and any such Person may certify or give an opinion
as to such matters in one or several documents.

                  Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or  representations
with respect to the matters upon which such  certificate or opinion is based are
erroneous.  Any such certificate or opinion of counsel may be based,  insofar as
it  relates  to  factual   matters,   upon  a  certificate  or  opinion  of,  or
representations  by, an officer or  officers  of the  Company  stating  that the
information  with respect to such factual  matters is in the  possession  of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know,  that the certificate or opinion or  representations  with respect to such
matters are erroneous.

                  Where any Person is required  to make,  give or execute two or
more applications,  requests, consents,  certificates,  statements,  opinions or
other instruments under this Indenture,  they may, but need not, be consolidated
and form one instrument.

                  SECTION 104. Acts of Holders;  Record Dates.  (a) Any request,
demand,  authorization,  direction,  notice,  consent,  waiver  or other  action
provided  by this  Indenture  to be given or taken by Holders may be embodied in
and evidenced by one or more instruments of  substantially  similar tenor signed
by such Holders in person or by an agent duly appointed in writing;  and, except
as herein otherwise expressly provided,  such action shall become effective when
such  instrument or  instruments  are delivered to the Trustee and,  where it is
hereby expressly required,  to the Company.  Such instrument or instruments (and
the action embodied therein and evidenced thereby) are herein sometimes referred
to as the "Act" of the Holders signing such instrument or instruments.  Proof of
execution of any such instrument or of a writing appointing any such agent shall
be  sufficient  for any purpose of this  Indenture  and (subject to Section 601)
conclusive  in favor  of the  Trustee  and the  Company,  if made in the  manner
provided in this Section.

                  (b) The fact and date of the  execution  by any  Person of any
such  instrument  or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer  authorized by
law to take  acknowledgments  of deeds,  certifying that the individual  signing
such instrument or writing acknowledged to him the execution thereof.

                                      -16-
<PAGE>

Where  such  execution  is by a signer  acting  in a  capacity  other  than such
Person's  individual   capacity,   such  certificate  or  affidavit  shall  also
constitute sufficient proof of such Person's authority. The fact and date of the
execution  of any such  instrument  or writing,  or the  authority of the Person
executing  the same,  may also be proved in any other  manner  which the Trustee
deems sufficient.

                  (c) The Company  may, in the  circumstances  permitted  by the
Trust  Indenture  Act,  fix any  date as the  record  date  for the  purpose  of
determining  the  Holders  entitled  to  give  or  take  any  request,   demand,
authorization, direction, notice, consent, waiver or other action, or to vote on
any action,  authorized or permitted to be given or taken by Holders. If not set
by the Company prior to the first solicitation of a Holder made by any Person in
respect  of any such  action,  or, in the case of any such  vote,  prior to such
vote,  the record date for any such action or vote shall be the 30th day (or, if
later,  the date of the most  recent  list of Holders  required  to be  provided
pursuant to Section 701) prior to such first  solicitation  or vote, as the case
may be. With regard to any record date,  only the Holders on such date (or their
duly  designated  proxies)  shall be entitled  to give or take,  or vote on, the
relevant action.

                  (d) The  ownership  of  Securities  shall  be  proved  by  the
 Security Register.

                  (e) Any request,  demand,  authorization,  direction,  notice,
consent,  waiver or other Act of the  Holder of any  Security  shall  bind every
future Holder of the same Security and the Holder of every Security  issued upon
the registration of transfer thereof or in exchange  therefor or in lieu thereof
in respect of  anything  done,  omitted or suffered to be done by the Trustee or
the Company in reliance thereon,  whether or not notation of such action is made
upon such Security.

                  SECTION  105.  Notices,  Etc.,  to Trustee  and  Company.  Any
request,  demand,  authorization,  direction,  notice, consent, waiver or Act of
Holders or other  document  provided or permitted  by this  Indenture to be made
upon, given or furnished to, or filed with,

               (1)  the  Trustee  by any  Holder  or by  the  Company  shall  be
          sufficient for every purpose  hereunder if made,  given,  furnished or
          filed in writing to or with the Trustee at its Corporate Trust Office,
          Attention: Corporate Trust Administration, or

               (2)  the  Company  by the  Trustee  or by  any  Holder  shall  be
          sufficient  for  every  purpose  hereunder  (unless  otherwise  herein
          expressly  provided)  if in writing  and mailed,  first-class  postage
          prepaid,  to  the  Company  addressed  to it at  the  address  of  its
          principal  office  specified in the first paragraph of this instrument
          or at any other  address  furnished  in writing to the  Trustee by the
          Company.

                  SECTION 106. Notice to Holders;  Waiver.  Where this Indenture
provides for notice to Holders of any event,  such notice shall be  sufficiently
given (unless  otherwise  herein  expressly  provided) if in writing and mailed,
first-class  postage  prepaid,  to each Holder  affected  by such event,  at the
address of the Holder as it appears in the Security Register, not later than the
latest  date (if  any),  and not  earlier  than  the  earliest  date  (if  any),
prescribed for the giving of such notice. In any case where notice to Holders is
given by mail, neither the failure to mail such

                                      -17-
<PAGE>

notice,  nor any defect in any notice so mailed,  to any particular Holder shall
affect the sufficiency of such notice with respect to other Holders.  Where this
Indenture  provides  for  notice in any  manner,  such  notice  may be waived in
writing by the Person  entitled to receive such notice,  either  before or after
the event,  and such waiver shall be the  equivalent of such notice.  Waivers of
notice by Holders shall be filed with the Trustee,  but such filing shall not be
a condition  precedent to the validity of any action taken in reliance upon such
waiver.

                  In case by reason of the suspension of regular mail service or
by reason of any other  cause it shall be  impracticable  to give such notice by
mail,  then such  notification as shall be made with the approval of the Trustee
shall constitute a sufficient notification for every purpose hereunder.

                  SECTION  107.  Conflict  with  Trust  Indenture  Act.  If  any
provision  hereof  limits,  qualifies or conflicts with a provision of the Trust
Indenture  Act that is  required  under such Act to be a part of and govern this
Indenture,  the  latter  provision  shall  control.  If any  provision  of  this
Indenture modifies or excludes any provision of the Trust Indenture Act that may
be so modified or  excluded,  the latter  provision  shall be deemed to apply to
this Indenture as so modified or to be excluded, as the case may be.

                  SECTION 108.  Effect of Headings  and Table of  Contents.  The
Article  and  Section  headings  herein  and  the  Table  of  Contents  are  for
convenience only and shall not affect the construction hereof.

                  SECTION  109.  Successors  and  Assigns.   All  covenants  and
agreements  in this  Indenture  by the  Company  shall bind its  successors  and
assigns, whether so expressed or not.

                  SECTION 110.  Separability  Clause.  In case any  provision in
this Indenture or in the Securities shall be invalid,  illegal or unenforceable,
the validity,  legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.

                  SECTION 111. Benefits of Indenture.  Nothing in this Indenture
or in the Securities,  express or implied,  shall give to any Person, other than
the parties hereto and their successors hereunder and the Holders of Securities,
any  benefit  or any  legal or  equitable  right,  remedy  or claim  under  this
Indenture.

                  SECTION 112.  Governing Law. THIS INDENTURE AND THE SECURITIES
SHALL BE GOVERNED BY AND CONSTRUED IN  ACCORDANCE  WITH THE LAWS OF THE STATE OF
NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.

                  SECTION 113.  Legal  Holidays.  In any case where any Interest
Payment Date,  Redemption Date, Purchase Date or Stated Maturity of any Security
shall not be a Business Day, then  (notwithstanding  any other provision of this
Indenture or of the  Securities)  payment of interest or  principal  need not be
made on such date, but may be made on the next succeeding  Business Day with the
same  force and effect as if made on the  Interest  Payment  Date or  Redemption
Date,  Purchase Date or at the Stated Maturity,  provided that no interest shall
accrue

                                      -18-
<PAGE>

for the period  from and after such  Interest  Payment  Date,  Redemption  Date,
Purchase Date or Stated Maturity, as the case may be.

                  SECTION  114.  Consent to  Service;  Jurisdiction.  Each party
hereto  irrevocably agrees that any legal suit, action or proceeding arising out
of or relating to this  Indenture or the  Securities  may be  instituted  in any
federal or state court in the Borough of Manhattan, The City of New York, waives
any objection  which it may now or hereafter  have to the laying of the venue of
any such legal suit, action or proceeding, waives any immunity from jurisdiction
or to service of process in respect of any such suit, action or proceeding,  and
irrevocably submits to the exclusive  jurisdiction of any such court in any such
suit, action or proceeding. The Company agrees that a final judgment in any such
suit,  action or  proceeding  shall be  conclusive  and may be enforced in other
jurisdictions  by suit on the judgment or in any other manner provided by law in
accordance with applicable law. The Company hereby  irrevocably waives any right
to invoke  jurisdiction  it may have to any court by virtue of Mexican  law. The
Company hereby appoints CT Corporation System Inc., 1633 Broadway, New York, New
York 10019 as its authorized agent upon which process may be served in any legal
suit,  action or proceeding  arising out of or relating to this Indenture or the
Securities  which may be instituted in any federal or state court in the Borough
of Manhattan, The City of New York, and agrees that service of process upon such
agent,  and written  notice of said service to the Company by the person serving
the same, shall be deemed in every respect effective service of process upon the
Company  in any such suit,  action or  proceeding  and  further  designates  its
domicile,  the domicile of CT Corporation  System Inc.  specified  above and any
domicile CT  Corporation  System Inc.  may have in the future as its domicile to
receive any notice hereunder  (including service of process).  If for any reason
CT Corporation System Inc. (or any successor agent for this purpose) shall cease
to act as agent for  service of process as  provided  above,  the  Company  will
promptly appoint a successor agent for this purpose reasonably acceptable to the
Trustee.  The Company  agrees to take any and all actions as may be necessary to
maintain  such  designation  and  appointment  of such  agent in full  force and
effect.

                  SECTION 115.  Language of Notices,  Etc. Any request,  demand,
authorization,  direction, notice, consent or waiver required or permitted under
this  Indenture  shall be in the English  language,  except  that any  published
notice may be in an official language of the country of publication.


                                   ARTICLE TWO

                                 SECURITY FORMS

                  SECTION 201. Forms Generally. The Securities and the Trustee's
certificate of  authentication  shall be in substantially the forms set forth in
this Article,  with such appropriate  insertions,  omissions,  substitutions and
other  variations as are required or permitted by this  Indenture,  and may have
such  letters,  numbers or other  marks of  identification  and such  legends or
endorsements  placed  thereon as may be required to comply with the rules of any
securities  exchange or as may,  consistently  herewith,  be  determined  by the
officers  executing  such  Securities,  as evidenced  by their  execution of the
Securities.

                                      -19-
<PAGE>

                  The definitive  Securities  shall be printed,  lithographed or
engraved or  produced  by any  combination  of these  methods on steel  engraved
borders or may be produced  in any other  manner  permitted  by the rules of any
securities  exchange on which the Securities may be listed, all as determined by
the officers executing such Securities,  as evidenced by their execution of such
Securities.

                  SECTION 202. Form of Face of Security.


                     GRUPO INDUSTRIAL DURANGO, S.A. de C.V.

                             12-6/8% NOTES DUE 2003

                                                             CUSIP No. 40050MAA4

No. R-1
$250,000,000


                  GRUPO INDUSTRIAL  DURANGO,  S.A. de C.V., a limited  liability
company duly  organized and existing under the laws of the United Mexican States
(herein called the "Company," which term includes any successor Person under the
Indenture  hereinafter referred to), for value received,  hereby promises to pay
to  _________________,  or registered assigns,  the principal sum of Two Hundred
and Fifty Million U.S.  Dollars on August 1, 2003,  and to pay interest  thereon
from  July 25,  1996 or from  the most  recent  Interest  Payment  Date to which
interest  has been paid or duly  provided  for,  semiannually  on February 1 and
August 1 in each  year,  commencing  February  1, 1997 at the rate of 126/8% per
annum,  until the principal  hereof is paid or made  available for payment.  The
interest so payable and  punctually  paid or duly  provided  for on any Interest
Payment  Date will,  as  provided  in the  Indenture  (as defined on the reverse
hereof),  be paid to the  Person  in whose  name this  Security  (or one or more
Predecessor  Securities)  is  registered at the close of business on the Regular
Record Date for such interest, which shall be the January 15 or July 15 (whether
or not a Business Day), as the case may be, next preceding such Interest Payment
Date.  Any  such  interest  not so  punctually  paid or duly  provided  for will
forthwith  cease to be payable to the Holder on such Regular Record Date and may
either  be paid to the  Person  in  whose  name  this  Security  (or one or more
Predecessor  Securities)  is  registered  at the close of  business on a Special
Record  Date  for the  payment  at such  Defaulted  Interest  to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities not less than 10
days  prior to such  Special  Record  Date,  or be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities  exchange
on which the Securities  may be listed,  and upon such notice as may be required
by such exchange,  all as more fully  provided in the Indenture.  Payment of the
principal of and interest on this  Security will be made at the office or agency
of the Company maintained in The City of New York for that purpose, in such coin
or currency  of the United  States of America as at the time of payment is legal
tender for payment of public and private debts;  provided,  however, that at the
option of the  Company  payment of interest  may be made by cheek  mailed to the
address  of the Person  entitled  thereto as such  address  shall  appear in the
Security Register.

                                      -20-
<PAGE>

                  The Company shall pay  Additional  Amounts and the  Securities
shall be subject to  redemption  by the Company as provided in Sections 1018 and
1101 of the Indenture.

                  Reference  is hereby  made to the further  provisions  of this
Security set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.

                  Unless  the  certificate  of  authentication  hereon  has been
executed by the Trustee  referred to on the reverse hereof by manual  signature,
this  Security  shall not be entitled to any benefit  under the  Indenture or be
valid or obligatory for any purpose.

                  IN WITNESS WHEREOF,  the Company has caused this instrument to
be duly executed under its corporate seal.



                                      GRUPO INDUSTRIAL DURANGO, S.A. de C.V.



                                      By:
                                         --------------------------------------
                                         Name:
                                         Title:
[SEAL)


Attest:

                                      -21-
<PAGE>

                  SECTION 203. Form of Reverse of Security. This Security is one
of a duly authorized issue of Securities of the Company designated as its 125/8%
Notes due 2003 (herein called the "Securities"),  limited in aggregate principal
amount to $250,000,000,  issued and to be issued under an Indenture, dated as of
July 25, 1996 (herein called the "Indenture"), between the Company and The Chase
Manhattan Bank, as Trustee (herein called the "Trustee," which term includes any
successor  trustee under the  Indenture),  to which Indenture and all indentures
supplemental  thereto reference is hereby made for a statement of the respective
rights,  limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the  Holders of the  Securities  and of the terms upon which the
Securities are, and are to be, authenticated and delivered.

                  The  Securities   shall  constitute   direct,   unsecured  and
unconditional  obligations  of the  Company  and  will  rank  pari  passu  among
themselves  and with all other present and future  unsecured and  unsubordinated
indebtedness  of the  Company,  other  than  obligations  which are  mandatorily
preferred by statute or by operation of law.

                  All  payments  of  principal  and  interest  in respect of the
Securities shall be made after  withholding or deduction for any taxes,  duties,
assessments  or  governmental  charges  of  whatever  nature  imposed,   levied,
collected,  withheld or assessed by or within Mexico or any authority therein or
thereof  having  power to tax.  The Company  shall pay such  additional  amounts
("Additional  Amounts") as will result in receipt by the Holders of such amounts
as would have been received by them had no such  withholding  or deduction  been
required,  except that no such Additional  Amounts shall be payable with respect
to any payment on any Security to the extent:

                  (i)  that  any  such  taxes,  duties,   assessments  or  other
         governmental  charges  would not have been imposed but for a connection
         between the Holder or beneficial  owner of such Security and Mexico (or
         any  authority  therein or thereof  having power to tax) other than the
         holding of such  Security  and the receipt of payments  with respect to
         such Security;

                  (ii)  of  any  such  taxes,   duties,   assessments  or  other
         governmental  charges with respect to a Security  presented for payment
         more than 30 days after the date on which such  payment  became due and
         payable or the date on which  payment  thereof is duly provided for and
         notice thereof given to Holders,  whichever occurs later, except to the
         extent  that the Holder of such  Security  would have been  entitled to
         such Additional  Amounts on presenting such Security for payment on any
         date during such 30-day period;

                  (iii) of any  Mexican  taxes to the extent  that such  Mexican
         taxes would not have been  imposed but for the failure of the Holder or
         beneficial  owner of such  Security to comply  with any  certification,
         identification,   information,   documentation   or   other   reporting
         requirement  if (a) such  compliance  is  required  by law  (including,
         without  limitation,  Article  154  of the  Mexican  Income  Tax  Law),
         regulation or  administrative  practice as a precondition  to exemption
         from, or reduction in the rate of withholding  of, Mexican taxes (other
         than a  reduction  or  exemption  pursuant  to any income tax treaty to
         which  Mexico is a party)  and (b) at least 30 days  prior to the first
         interest  payment  date with  respect to which the Company  shall apply
         this clause (iii), the Company shall have

                                      -22-
<PAGE>

         notified  the  Trustee in writing that the Holders or beneficial Owners
         of  the  Securities   will  be required to provide such  information or
         documentation;

                  (iv) of any Mexican  taxes  imposed at a rate in excess of 15%
         if (a) such  Holder or  beneficial  owner has  failed to  provide  on a
         timely basis, at the reasonable  request of the Company (subject to the
         conditions set forth below),  information or  documentation  concerning
         such Holder's or beneficial  owner's  eligibility for benefits under an
         income  tax  treaty to which  Mexico is a party  that is  necessary  to
         determine the  appropriate  rate of deduction or withholding of Mexican
         taxes  under any such  treaty and (b) at least  thirty 30 days prior to
         the first Interest Payment Date with respect to which the Company shall
         make such  request,  the  Company  shall have  notified  the Trustee in
         writing that the holders or beneficial owners of the Securities will be
         required to provide such information or documentation; or

                  (v) of estate,  inheritance,  gift,  property or other similar
         taxes imposed with respect to such Security.

                  Notwithstanding   the  foregoing,   the   limitations  on  the
Company's  obligation to pay  Additional  Amounts set forth in clauses (iii) and
(iv)  above  shall not apply if a  certification,  identification,  information,
documentation or other reporting  requirement  described in clause (iii), or the
provision of information or documentation  described in clause (iv), as the case
may be,  would be  materially  more  onerous,  in form,  in  procedure or in the
substance of information disclosed, to such Holders or beneficial owners (taking
into account any relevant  differences  between U.S. and Mexican law, regulation
or  administrative  practice) than  comparable  information  or other  reporting
requirements  imposed  under  U.S.  tax  law,  regulation   (including  proposed
regulations) and administrative practice or other reporting requirements imposed
as of  July  22,  1996  under  U.S.  tax  law,  regulation  (including  proposed
regulations) and administrative  practice (such as IRS Forms 1001, W-8 and W-9).
Notwithstanding  the  preceding  sentence,  so long as Rule  252  issued  by the
Secretaria de Hacienda y Credito  Publico (the "Ministry of Finance")  published
in the Diario  Oficial de la  Federacion  on March 29,  1996 or a  substantially
similar  successor of such rule is in effect,  the  limitations on the Company's
obligation to pay  Additional  Amounts set forth in Clause (iii) above shall not
apply unless (a) the certification,  identification,  information, documentation
or other  reporting  requirement  described  in such Clause (iii) is required in
order to apply Rule 252 (or a substantially similar successor rule thereto), (b)
the Company  cannot  obtain  such  certification,  identification,  information,
documentation or other reporting  requirement  through reasonable  diligence and
(c) the Company  otherwise would meet the  requirements  for application of Rule
252 (or a substantially  similar successor rule thereto).  In addition,  clauses
(iii) and (iv)  above  shall not be  construed  to  require  that a  non-Mexican
pension or retirement fund or a non-Mexican  financial  institution or any other
Holder  register  with the  Ministry of Finance for the purpose of  establishing
eligibility  for an exemption from Mexican  withholding tax or to require that a
Holder or beneficial owner certify or provide information  concerning whether it
is or is not a tax-exempt pension or retirement fund.

                  Upon the  Trustee's  receipt of timely  notification  from the
Company  that the  Holders or  beneficial  owners  will be  required  to provide
information or  documentation,  as described in clause (iii) or (iv) above,  the
Trustee shall provide such notification to the Holders or

                                      -23
<PAGE>

beneficial owners, as the case may be. The Company shall, as soon as practicable
and in no event later than 30 days  following  the due date for each  payment of
Mexican taxes  withheld by the Company with respect to the  Securities,  provide
the Trustee with a certified copy of the official receipt evidencing the payment
of such taxes.  The Trustee shall,  for a period of five years following the due
date for each payment,  maintain in its files each such  certified copy received
from the Company.

                  The Trustee  shall,  upon  written  request by the  beneficial
owner of a Security or any Paying Agent, provide such owner or Paying Agent with
a copy of the  certified  copy of the  receipt  provided  to the  Trustee by the
Company regarding the amount of Mexican tax withheld by the Company with respect
to the  Securities  within 30 Business Days following the receipt by the Trustee
of such request.

                  All  references  in this  Security to principal or interest in
respect  of any  Security  shall be deemed to mean and  include  all  Additional
Amounts,  if any,  payable in respect of such principal or interest,  unless the
context  otherwise  requires,  and express  mention of the payment of Additional
Amounts in any provision hereof shall not be construed as excluding reference to
Additional  Amounts in those provisions hereof where such express mention is not
made.  All  references  in this Security to principal in respect of any Security
shall be deemed to mean and  include  any  redemption  price or  purchase  price
payable in respect of such  Security  pursuant to any  redemption  provided  for
above or pursuant to any Offer to Purchase,  and express  mention of the payment
of any redemption  price or purchase price in any provision  hereof shall not be
construed as excluding  reference to any  redemption  price or purchase price in
those provisions hereof where such express reference is not made.

                  In the  event  that  Additional  Amounts  actually  paid  with
respect to the  Securities  are based on rates of  deduction or  withholding  of
Mexican  taxes in excess of the  appropriate  rate  applicable  to the Holder or
beneficial  owner of such Securities,  and, as a result thereof,  such Holder or
beneficial  owner is  entitled  to make a claim  for a refund  or credit of such
excess from Mexican tax authorities, then such Holder or beneficial owner shall,
by accepting  the  Securities,  be deemed to have assigned and  transferred  all
right,  title  and  interest  to any such  claim  for a refund or credit of such
excess  to the  Company.  However,  by making  such  assignment,  the  Holder or
beneficial  owner makes no  representation  or warranty that the Company will be
entitled  to  receive  such  claim for a refund or  credit  and  incurs no other
obligation with respect thereto.

                  Reference is made to Section 1018 of the Indenture for further
provisions with respect to the payment of Additional Amounts.

                  If, as a result of any  amendment  to, or change  in, the laws
(or any regulation or rulings thereunder) of Mexico or any political subdivision
or taxing  authority  thereof or therein,  or any  amendment  to or change in an
official  interpretation  or  application  regarding  such laws,  regulations or
rulings,  which  amendment,   change,   application  or  interpretation  becomes
effective on or after July 22, 1996,  the Company pays or would be obligated for
reasons outside its control,  and after taking reasonable  measures available to
it to avoid  such  obligation,  to pay  Additional  Amounts  in  respect  of any
Security  pursuant  to the  terms  and  conditions  thereof  in  excess of those
attributable to the Mexican  withholding tax of 15% imposed on interest payments
to

                                      -24-
<PAGE>

Holders,  then, at the option of the Company, the Securities may be redeemed, as
a whole but not in part, at any time, upon giving not less than 30 nor more than
60 days' notice by mail to the Holders (which notice shall be irrevocable), at a
Redemption  Price equal to the principal  amount thereof,  together with accrued
interest to the  Redemption  Date  (subject to the right of Holders of record on
the relevant  Record Date to receive  interest due on the Interest  Payment Date
that is on or prior to the  Redemption  Date) and any  Additional  Amounts which
would  otherwise be payable;  provided that (i) no such notice of redemption may
be given  earlier than 90 days prior to the  earliest  date on which the Company
would but for such  redemption be obligated to pay such  Additional  Amounts and
(ii) at the time such notice is given,  such  obligation to pay such  Additional
Amounts remains in effect.

                  Prior to the publication of any notice of redemption  pursuant
to this  provision,  the Company  shall  deliver to the Trustee (i) an Officers'
Certificate  stating that the Company is entitled to effect such  redemption and
setting  forth a statement  of facts  showing that the  condition or  conditions
precedent  to the right of the  Company so to redeem have  occurred  and (ii) an
Opinion of Mexican  Counsel to the effect that the  Company has or shall  become
obligated  to pay such  Additional  Amounts  as a result  of such  amendment  or
change.  Such notice,  once  delivered  by the Company to the Trustee,  shall be
irrevocable.

                  The Company  shall pay all stamp and similar  duties,  if any,
which may be  imposed  by  Mexico,  the  United  States of  America or any other
governmental  entity or political  subdivision  therein or thereof or any taxing
authority of or in any of the  foregoing,  with respect to the  Indenture or the
initial issuance of this Security.

                  Except  as  specifically  provided  in  this  Security  or the
Indenture, the Company shall not be required to make any payment with respect to
any tax,  duty,  assessment  or other  governmental  charge of  whatever  nature
imposed  or levied by any  government  or any  political  subdivision  or taxing
authority thereof or therein.

                  If an Event of  Default  shall  occur and be  continuing,  the
principal  of all the  Securities  may be declared due and payable in the manner
and with the effect provided in the Indenture.

                  The Indenture provides that, subject to certain conditions, if
(i) certain Net Cash  Proceeds  are  available  to the Company as a result of an
Asset  Disposition  or (ii) a Change of Control  occurs,  the  Company  shall be
required  to make an Offer to  Purchase  for all or a  specified  portion of the
Securities.

                  The Indenture  contains  provisions for defeasance at any time
of (i) the entire  indebtedness  of this  Security or (ii)  certain  restrictive
covenants and Events of Default with respect to this Security, in each case upon
compliance with certain conditions set forth therein.

                  The  Indenture  permits,  with certain  exceptions  as therein
provided,  the  amendment  thereof  and  the  modification  of  the  rights  and
obligations of the Company and the rights of the Holders of the Securities under
the Indenture at any time by the Company and the Trustee with the consent of the
Holders of a majority in aggregate principal amount of the Securities at the

                                      -25-
<PAGE>

time Outstanding.  The Indenture also contains provisions permitting the Holders
of specified  percentages in aggregate principal amount of the Securities at the
time  Outstanding,  on behalf of the  Holders  of all the  Securities,  to waive
compliance  by the Company with certain  provisions of the Indenture and certain
past defaults  under the Indenture and their  consequences.  Any such consent or
waiver by the Holder of this Security  shall be conclusive and binding upon such
Holder and upon all future  Holders of this Security and of any Security  issued
upon the  registration  of transfer  hereof or in exchange  therefore or in lieu
hereof,  whether  or not  notation  of such  consent or waiver is made upon this
Security.

                  As provided in and subject to the provisions of the Indenture,
the Holder of this Security shall not have any right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder,  unless such Holder shall have previously given
written notice to the Trustee of a continuing  Event of Default,  the Holders of
not less than 25% in principal  amount of the Outstanding  Securities shall have
made written request to the Trustee to institute  proceedings in respect of such
Event of Default as Trustee and offered the Trustee  reasonable  indemnity,  the
Trustee  for 60 days after the  receipt  of such  notice,  request  and offer of
indemnity  has  failed  to  institute  any  such  proceeding,  and no  direction
inconsistent  with such request shall have been given to the Trustee during such
60-day  period  by  the  Holders  of a  majority  in  principal  amount  of  the
Outstanding Securities.  The foregoing shall not apply to any suit instituted by
the Holder of this  Security  for the  enforcement  of any payment of  principal
hereof or interest hereon on or after the respective due dates expressed herein.

                  No reference  herein to the Indenture and no provision of this
Security  or of the  Indenture  shall  alter or  impair  the  obligation  of the
Company,  which is  absolute  and  unconditional,  to pay the  principal  of and
interest  on this  Security  at the  times,  place and rate,  and in the coin or
currency, herein prescribed.

                  As   provided  in  the   Indenture   and  subject  to  certain
limitations  therein set forth,  the transfer of this Security is registrable in
the Security  Register,  upon  surrender of this  Security for  registration  of
transfer  at the office or agency of the  Company in The City of New York,  duly
endorsed  by,  or  accompanied  by a  written  instrument  of  transfer  in form
satisfactory to the Security  Registrar duly executed by the Holder hereof or an
attorney for the Holder duly  authorized  in writing,  and thereupon one or more
new Securities, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.

                  The  Securities  are issuable only in registered  form without
coupons  in  denominations  of $1,000  and any  integral  multiple  thereof.  As
provided in the Indenture and subject to certain  limitations therein set forth,
Securities are exchangeable for a like aggregate  principal amount of Securities
of a different authorized denomination,  as requested by the Holder surrendering
the same.

                  No service charge shall be made for any such  registration  of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.

                                      -26-
<PAGE>

                  Prior to due presentment of this Security for  registration of
transfer,  the Company,  the Trustee and any agent of the Company or the Trustee
may treat the  Person in whose name this  Security  is  registered  as the owner
hereof for all purposes,  whether or not this  Security be overdue,  and neither
the  Company,  the Trustee nor any such agent shall be affected by notice to the
contrary.

                  Interest  on this Security shall be computed on the basis of a
360-day  year of twelve  30-day months.

                  All  terms  used in this  Security  which are  defined  in the
Indenture shall have the meanings assigned to them in the Indenture.

                  THE  INDENTURE  AND THIS  SECURITY  SHALL BE  GOVERNED  BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS.

                       OPTION OF HOLDER TO ELECT PURCHASE

                  If you want to elect to have this  Security  purchased  in its
entirety by the Company pursuant to Section 1015 or 1016 of the Indenture, check
the box:

                  |_|

                  If you  want to  elect  to have  only a part of this  Security
purchased  by the  Company  pursuant to Section  1015 or 1016 of the  Indenture,
state the amount: $

Dated:                                 Your Signature:
                                       -----------------------------
                                       (Sign exactly as name appears
                                       on the other side of this Security)


                  SECTION 204. Form of Trustee's  Certificate of Authentication.
This is one of the Securities referred to in the within-mentioned Indenture.


Dated:                                     THE CHASE MANHATTAN BANK,
                                                          as Trustee



                                           By
                                             -----------------------------------
                                                    Authorized Signatory


                  SECTION  205.  Book-Entry  Notes.  (a)  Anything  in the other
provisions  of this  Indenture to the contrary  notwithstanding,  it is intended
that the Securities  shall be initially  represented  by one or more  registered
global notes (the "Global Notes") in an amount equal to the aggregate  principal
amount of the Securities which shall be deposited with, or on behalf of,

                                      -27-
<PAGE>

The  Depository  Trust  Company,  New  York,  New York  (the  "Depositary")  and
registered in the name of the  Depositary's  nominee.  The Global Notes shall be
substantially  in the form provided in Section 201, with such  modifications  as
may be necessary  or  desirable to reflect the issuance  thereof in global form,
and may be transferred, in whole and not in part, only to another nominee of the
Depositary  or to a successor of the  Depositary  or its  nominee.  If a Company
Order pursuant to Section 303 has been, or  simultaneously  is,  delivered,  any
further  instructions by the Company with respect to the endorsement or delivery
of the Global Notes shall be in writing but need not comply with Section 102 and
need not be accompanied  by an Opinion of Mexican  Counsel or an Opinion of U.S.
Counsel.

                  The  Global  Notes  shall bear a legend  substantially  to The
following  effect:  "Unless  this  Global  Note is  presented  by an  authorized
representative  of The Depository Trust Company  ("DTC"),  to the Company or its
agent for  registration  of transfer,  exchange or payment,  and any Global Note
issued  is  registered  in the name of Cede & Co.,  as  nominee  of DTC (and any
payment  hereon is made to Cede & Co. or to such other entity as is requested by
an authorized  representative of DTC), any transfer,  pledge or other use hereof
for value or otherwise  by or to any other  person is wrongful,  inasmuch as the
record  owner  hereof,  Cede & Co. (or such other  entity as is  requested by an
authorized representative of DTC), has an interest herein."

                  (b) So long as a nominee of the  Depositary is the  registered
owner of the Global Notes,  such nominee will be  considered  the sole owner and
holder of the Securities  represented by the Global Notes under this  Indenture.
Except as provided  below,  owners of  beneficial  interests in the Global Notes
will  not be  entitled  to  have  Securities  represented  by the  Global  Notes
registered in their names,  will not receive or be entitled to receive  physical
delivery of the Securities in  certificated  form and will not be considered the
owners or holders thereof under this Indenture.

                  Neither  the  Company,  the Trustee  nor any  Underwriter  (as
defined in the Underwriting Agreement) will have any responsibility or liability
for any  aspect of the  records  relating  to or  payments  made on  account  of
beneficial  ownership  interests  in  the  Global  Notes,  or  for  maintaining,
supervising or reviewing any records relating to such beneficial interests.

                  Principal and interest  payments on Notes  represented  by the
Global Notes shall be made to the  Depositary's  nominee as the registered owner
of the Global Notes.  Under the terms hereof,  the Company and the Trustee shall
treat the persons in whose names the Notes are  registered as the owners of such
Notes for the purpose of  receiving  payment of  principal  and interest on such
Notes and for all other purposes whatsoever.  Therefore, neither the Company nor
the  Trustee  has any direct  responsibility  or  liability  for the  payment of
principal  or interest  on the Notes to owners of  beneficial  interests  in the
Global Notes.

                  (c) If the  Depositary  is at any time  unwilling or unable to
continue  as  depositary  and a successor  depositary  is not  appointed  by the
Company within 90 days, the Company shall issue Securities in definitive form in
exchange  for the  Global  Notes.  In  addition,  the  Company  may at any  time
determine  not to have the  Securities  represented  by the Global Notes and, in
such event, the Company will issue Securities in definitive form in exchange for
the Global Notes representing such Securities. In any such instance, an owner of
a beneficial interest

                                      -28-
<PAGE>

in the Global Notes will be entitled to physical  delivery in certificated  form
of Securities equal in principal amount to such beneficial  interest and to have
such  Securities  registered in its name.  Securities so issued in  certificated
form  will be  issued  in the  denominations  and in the form  provided  in this
Indenture.


                                  ARTICLE THREE

                                 THE SECURITIES

                  SECTION 301. Title and Terms.  The aggregate  principal amount
of Securities which may be  authenticated  and delivered under this Indenture is
limited to $250,000,000,  except for Securities authenticated and delivered upon
registration  of,  transfer  of,  or in  exchange  for,  or in  lieu  of,  other
Securities  pursuant to Section 304, 305, 306 or 906, or in  connection  with an
Offer to Purchase pursuant to Section 1015 or 1016.

                  The  Securities  shall be known and  designated as the "125/8%
Notes due 2003" of the Company.  Their Stated  Maturity shall be August 1, 2003,
and they shall bear interest at the rate of 126/8% per annum, from July 25, 1996
or from the most recent Interest Payment Date to which interest has been paid or
duly provided for, as the case may be,  payable  semiannually  on February 1 and
August 1, commencing  February 1, 1997,  until the principal  thereof is paid or
made available for payment.

                  The  principal  of and  interest  on the  Securities  shall be
payable  at the  office  or  agency  of the  Company  in The  City  of New  York
maintained for such purpose and at any other office or agency  maintained by the
Company for such purpose;  provided,  however, that at the option of the Company
payment of  interest  may be made by check  mailed to the  address of the Person
entitled thereto as such address shall appear in the Security Register.

                  The Company shall pay Additional  Amounts,  and the Securities
shall be subject to redemption by the Company,  as provided in Sections 1018 and
1101.

                  The  Securities  shall be subject to repurchase by the Company
pursuant to an Offer to Purchase as provided in Sections 1015 and 1016.

                  The Securities shall be subject to Defeasance at the option of
the Company as provided in Article Twelve.

                  The  Securities   shall  constitute   direct,   unsecured  and
unconditional  obligations  of the  Company  and  will  rank  pari  passu  among
themselves  and with all other present and future  unsecured and  unsubordinated
indebtedness  of the  Company,  other  than  obligations  which are  mandatorily
preferred by statute or by operation of law.

                  SECTION 302.  Denominations.  The Securities shall be issuable
only in registered form without coupons and only in  denominations of $1,000 and
any integral multiple thereof.

                                      -29-
<PAGE>

                  SECTION 303. Execution,  Authentication,  Delivery and Dating.
The Securities shall be executed on behalf of the Company by its Chairman of the
Board,  its  Vice  Chairman  of the  Board,  its  President  or one of its  Vice
Presidents,  under  its  corporate  seal  reproduced  thereon  attested  by  its
Secretary or one of its  Assistant  Secretaries.  The  signature of any of these
officers on the Securities may be manual or facsimile.

                  Securities  bearing  the  manual or  facsimile  signatures  of
individuals  who were at any time the proper  officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities.

                  At any time and from  time to time  after  the  execution  and
delivery of this Indenture,  the Company may deliver Securities  executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication  and delivery of such  Securities;  and the Trustee in accordance
with such Company Order shall  authenticate  and make such Securities  available
for delivery as in this Indenture provided and not otherwise.

                  Each Security shall be dated the date of its authentication.

                  No  Security  shall be  entitled  to any  benefit  under  this
Indenture or be valid or obligatory for any purpose unless there appears on such
Security a certificate of authentication  substantially in the form provided for
herein executed by the Trustee by manual  signature,  and such  certificate upon
any Security  shall be conclusive  evidence,  and the only  evidence,  that such
Security has been duly authenticated and delivered hereunder.

                  SECTION 304. Temporary Securities.  Pending the preparation of
definitive  Securities,  the Company may  execute,  and upon  Company  Order the
Trustee shall authenticate and make available for delivery, temporary Securities
which  are  printed,  lithographed,   typewritten,   mimeographed  or  otherwise
produced,  in any  authorized  denomination,  substantially  of the tenor of the
definitive Securities in lieu of which they are issued and with such appropriate
insertions,  omissions,  substitutions  and  other  variations  as the  officers
executing such Securities may determine, as evidenced by their execution of such
Securities.

                  If  temporary  Securities  are issued,  the Company will cause
definitive  Securities  to be prepared  without  unreasonable  delay.  After the
preparation  of  definitive  Securities,   the  temporary  Securities  shall  be
exchangeable   for  definitive   Securities  upon  surrender  of  the  temporary
Securities at any office or agency of the Company designated pursuant to Section
1002,  without charge to the Holder.  Upon surrender for cancellation of any one
or more  temporary  Securities  the Company  shall execute and the Trustee shall
authenticate  and make  available  for  delivery  in  exchange  therefor  a like
principal amount of definitive Securities of authorized denominations.  Until so
exchanged the temporary Securities shall in all respects be entitled to the same
benefits under this Indenture as definitive Securities.

                  SECTION  305.  Registration  of  Transfer  and  Exchange.  The
Company  shall cause to be kept at the  Corporate  Trust Office of the Trustee a
register  (the  register  maintained  in such office and in any other  office or
agency designated pursuant to Section 1002 being herein

                                      -30-
<PAGE>

sometimes collectively referred to as the "Security Register") in which, subject
to such  reasonable  regulations as it may prescribe,  the Company shall provide
for the  registration of Securities and of transfers of Securities.  The Trustee
is  hereby  appointed  "Security  Registrar"  for  the  purpose  of  registering
Securities and transfers of Securities as herein provided.

                  Upon surrender for registration of transfer of any Security at
an office or agency of the Company designated  pursuant to Section 1002 for such
purpose,  the Company  shall  execute,  and the Trustee shall  authenticate  and
deliver,  in the name of the designated  transferee or transferees,  one or more
new Securities of any authorized denominations and of a like aggregate principal
amount.

                  At the option of the Holder,  Securities  may be exchanged for
other  Securities  of any  authorized  denominations  and  of a  like  aggregate
principal  amount,  upon  surrender  of the  Securities  to be exchanged at such
office or agency.  Whenever any Securities are so surrendered for exchange,  the
Company shall  execute,  and the Trustee  shall  authenticate  and deliver,  the
Securities which the Holder making the exchange is entitled to receive.

                  All  Securities  issued upon any  registration  of transfer or
exchange of Securities shall be the valid obligations of the Company, evidencing
the same debt,  and entitled to the same benefits under this  Indenture,  as the
Securities surrendered upon such registration of transfer or exchange.

                  Every Security  presented or surrendered  for  registration of
transfer or for exchange shall (if so required by the Company or the Trustee) be
duly endorsed,  or be  accompanied  by a written  instrument of transfer in form
satisfactory to the Security  Registrar duly executed,  by the Holder thereof or
an attorney for such Holder duly authorized in writing.

                  No  service  charge  shall  be made  for any  registration  of
transfer or exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental  charge that may be imposed in
connection with any  registration  of transfer or exchange of Securities,  other
than exchanges pursuant to Section 304 or 906 or in accordance with any Offer to
Purchase pursuant to Section 1015 or 1016.

                  The  Company  shall not be  required  to issue,  register  the
transfer  of or  exchange  any  Security  after the  opening of business 15 days
before the day of the  mailing of a notice of  redemption  of  Securities  under
Section 1103.

                  SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any  mutilated  Security is  surrendered  to the Trustee,  the Company  shall
execute and the Trustee shall  authenticate  and deliver in exchange  therefor a
new  Security  of like  tenor and  principal  amount  and  bearing a number  not
contemporaneously outstanding.

                  If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such  security or  indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a

                                      -31-
<PAGE>

bona  fide   purchaser,   the  Company  shall  execute  and  the  Trustee  shall
authenticate  and  deliver,  in  lieu of any  such  destroyed,  lost  or  stolen
Security, a new Security of like tenor and principal amount and bearing a number
not contemporaneously outstanding.

                  In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable,  the Company in its discretion
may, instead of issuing a new Security, pay such Security.

                  Upon the issuance of any new Security under this Section,  the
Company may require  the payment of a sum  sufficient  to cover any tax or other
governmental  charge  that may be  imposed  in  relation  thereto  and any other
expenses (including the fees and expenses of the Trustee) connected therewith.

                  Every new Security  issued pursuant to this Section in lieu of
any destroyed,  lost or stolen Security shall constitute an original  additional
contractual  obligation of the Company,  whether or not the  destroyed,  lost or
stolen  Security  shall be at any  time  enforceable  by  anyone,  and  shall be
entitled to all the benefits of this Indenture equally and proportionately  with
any and all other Securities duly issued hereunder.

                  The  provisions  of  this  Section  are  exclusive  and  shall
preclude (to the extent  lawful) all other  rights and remedies  with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.

                  SECTION 307. Payment of Interest;  Interest Rights  Preserved.
Interest  on any  Security  which  is  payable  and is  punctually  paid or duly
provided for on any  Interest  Payment Date shall be paid to the Person in whose
name that Security (or one or more Predecessor  Securities) is registered at the
close of business on the Regular Record Date for such interest.

                  Any  interest on any  Security  which is  payable,  but is not
punctually  paid or duly  provided  for, on any  Interest  Payment  Date (herein
called  "Defaulted  Interest") shall forthwith cease to be payable to the Holder
on the relevant  Regular  Record Date by virtue of having been such Holder,  and
such  Defaulted  Interest  may be paid by the  Company,  at its election in each
case, as provided in Clause (1) or (2) below:

                  (1) The  Company  may elect to make  payment of any  Defaulted
         Interest  to the  Persons  in whose  names  the  Securities  (or  their
         respective  Predecessor  Securities)  are  registered  at the  close of
         business on a Special  Record  Date for the  payment of such  Defaulted
         Interest,  which shall be fixed in the  following  manner.  The Company
         shall notify the Trustee in writing of the amount of Defaulted Interest
         proposed  to be paid  on each  Security  and the  date of the  proposed
         payment,  and at the  same  time the  Company  shall  deposit  with the
         Trustee an amount of money equal to the aggregate amount proposed to be
         paid in respect of such Defaulted  Interest or shall make  arrangements
         satisfactory  to the Trustee for such deposit  prior to the date of the
         proposed payment, such money when deposited to be held in trust for the
         benefit of the Persons  entitled to such Defaulted  Interest as in this
         Clause provided.  Thereupon the Trustee shall fix a Special Record Date
         for the payment of such Defaulted Interest which shall be not more

                                      -32-
<PAGE>

         than 15  days   and  not  less   than 10 days  prior to the date of the
         the proposed payment and not less than 10 days after the receipt by the
         Trustee  of the  notice of the  proposed  payment.  The  Trustee  shall
         promptly  notify the  Company of such  Special  Record Date and, in the
         name and at the  expense  of the  Company,  shall  cause  notice of the
         proposed payment of such Defaulted Interest and the Special Record Date
         therefor to be mailed,  first-class  postage prepaid, to each Holder at
         the address of such Holder as it appears in the Security Register,  not
         less than 10 days  prior to such  Special  Record  Date.  Notice of the
         proposed payment of such Defaulted Interest and the Special Record Date
         therefor having been so mailed,  such Defaulted  Interest shall be paid
         to the  Persons  in whose  names the  Securities  (or their  respective
         Predecessor Securities) are registered at the close of business on such
         Special  Record  Date and shall no longer be  payable  pursuant  to the
         following Clause (2).

                  (2) The Company may make payment of any Defaulted  Interest in
         any other lawful manner not  inconsistent  with the requirements of any
         securities  exchange on which the  Securities  may be listed,  and upon
         such notice as may be required by such exchange, if, after notice given
         by the Company to the Trustee of the proposed  payment pursuant to this
         Clause,  such  manner of  payment  shall be deemed  practicable  by the
         Trustee.

                  Subject to the  foregoing  provisions  of this  Section,  each
Security  delivered under this Indenture upon  registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Security.

                  SECTION 308.  Persons Deemed Owners.  Prior to due presentment
of a Security for  registration  of transfer,  the Company,  the Trustee and any
agent of the  Company  or the  Trustee  may treat the  Person in whose name such
Security  is  registered  as the  owner  of such  Security  for the  purpose  of
receiving  payment of principal of and (subject to Section 307) interest on such
Security and for all other purposes whatsoever,  whether or not such Security be
overdue,  and neither the  Company,  the Trustee nor any agent of the Company or
the Trustee shall be affected by notice to the contrary.

                  SECTION 309.  Cancellation.  All  Securities  surrendered  for
payment, redemption,  registration of transfer or exchange or for credit against
any Offer to Purchase  pursuant to Section 1015 or 1016 shall, if surrendered to
any Person  other than the  Trustee,  be  delivered  to the Trustee and shall be
promptly cancelled by it. The Company may at any time deliver to the Trustee for
cancellation any Securities  previously  authenticated  and delivered  hereunder
which the Company may have acquired in any manner whatsoever, and all Securities
so delivered shall be promptly cancelled by the Trustee.  No Securities shall be
authenticated in lieu of or in exchange for any Securities cancelled as provided
in this Section,  except as expressly permitted by this Indenture.  All canceled
Securities held by the Trustee shall be destroyed  unless the Trustee shall have
received written instructions from the Company directing it to take other action
with respect thereto.

                  SECTION  310.   Computation  of  Interest.   Interest  on  the
Securities  shall be  computed on the basis of a 360-day  year of twelve  30-day
months.

                                      -33-
<PAGE>

                  SECTION  311.  CUSIP  Numbers.  The  Company  in  issuing  the
Securities may use "CUSIP"  numbers (if then generally in use),  and, if so, the
Trustee shall use "CUSIP"  numbers in notices of redemption as a convenience  to
Holders;  provided that any such notice may state that no representation is made
as to the correctness of such numbers, either as printed on the Securities or as
contained in any notice of a redemption, and that reliance may be placed only on
the  other  identification  numbers  printed  on the  Securities,  and any  such
redemption shall not be affected by any defect in, or omission of, such numbers.


                                  ARTICLE FOUR

                           SATISFACTION AND DISCHARGE

                  SECTION 401.  Satisfaction  and Discharge of  Indenture.  This
Indenture shall cease to be of further effect (except as to any surviving rights
of registration of transfer or exchange of Securities herein expressly  provided
for),  and the Trustee,  on demand of and at the expense of the  Company,  shall
execute  proper  instruments  acknowledging  satisfaction  and discharge of this
Indenture, when

                  (1)      either

                           (A)  all  Securities  theretofore  authenticated  and
                  delivered   (other  than  (i)   Securities   which  have  been
                  destroyed, lost or stolen and which have been replaced or paid
                  as  provided  in  Section  306 and (ii)  Securities  for whose
                  payment  money  has  theretofore  been  deposited  in trust or
                  segregated  and held in trust by the  Company  and  thereafter
                  repaid  to the  Company  or  discharged  from such  trust,  as
                  provided in Section  1003) have been  delivered to the Trustee
                  for cancellation; or

                           (B)  all such Securities not theretofore delivered to
                  the Trustee for cancellation

                              (i)  have become due and payable, or

                              (ii) will  become   due   and   payable  at  their
                           Stated  Maturity  within one year, or

                             (iii) are  to  be  called  for   redemption  within
                           one  year  under  arrangements  satisfactory  to  the
                           Trustee for the giving of notice of redemption by the
                           Trustee  in the  name,  and at  the  expense,  of the
                           Company,

                  and the Company,  in the case of (i), (ii) or (iii) above, has
                  deposited or caused to be deposited  with the Trustee as trust
                  funds in trust for the purpose an amount sufficient to pay and
                  discharge  the  entire  indebtedness  on such  Securities  not
                  theretofore  delivered  to the Trustee far  cancellation,  for
                  principal and interest to

                                      -34-
<PAGE>

                  the date of such deposit (in the case of Securities which have
                  become  due  and  payable)  or  to  the  Stated   Maturity  or
                  Redemption Date, as the case may be;

                  (2)  the  Company   has  paid  or caused  to be paid all other
         sums  payable  hereunder  by the Company; and

                  (3)  the Company  has delivered  to the  Trustee an  Officers'
         Certificate,  an  Opinion  of  Mexican  Counsel  and an Opinion of U.S.
         Counsel, each stating that all conditions precedent herein provided for
         relating to the  satisfaction and discharge of this Indenture have been
         complied with.

Notwithstanding   the  satisfaction   and  discharge  of  this  Indenture,   the
obligations  of the Company to the Trustee under Section 607 and, if money shall
have been deposited with the Trustee  pursuant to subclause (B) of Clause (1) of
this  Section,  the  obligations  of the Trustee  under Section 402 and the last
paragraph of Section 1003 shall survive.

                  SECTION  402.  Application  of  Trust  Money.  Subject  to the
provisions of the last paragraph of Section 1003,  all money  deposited with the
Trustee  pursuant  to Section  401 shall be held in trust and  applied by it, in
accordance  with the  provisions of the Securities  and this  Indenture,  to the
payment,  either  directly or through any Paying  Agent  (including  the Company
acting as its own Paying  Agent) as the  Trustee may  determine,  to the Persons
entitled thereto, of the principal and interest for whose payment such money has
been  deposited  with the Trustee;  but such money need not be  segregated  from
other funds except to the extent required by law.


                                  ARTICLE FIVE

                                    REMEDIES
                                    --------

                  SECTION 501. Events of Default.  "Event of Default,"  wherever
used herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of arty administrative or governmental body):

          (1) default in the  payment of the  principal  of any  Security at its
     Maturity; or

          (2) default in the payment of any interest  upon any Security  when it
     becomes due and payable, and continuance of such default for a period of 30
     days; or

          (3)  default,  on the  applicable  Purchase  Date,  in the purchase of
     Securities  required to be purchased by the Company pursuant to an Offer to
     Purchase as to which an Offer has been mailed to Holders; or

          (4) failure to perform or comply with the  provisions  of Section 801;
     or

                                      -35-
<PAGE>

          (5) default in the performance, or breach, of any covenant or warranty
     of the  Company in this  Indenture  (other  than a covenant  or  warranty a
     default in whose  performance  or whose breach is elsewhere in this Section
     specifically  dealt with),  and continuance of such default or breach for a
     period of 30 days after there has been given, by overnight courier,  to the
     Company by the  Trustee or to the Company and the Trustee by the Holders of
     at least 10% in principal  amount of the  Outstanding  Securities a written
     notice  specifying  such default or breach and  requiring it to be remedied
     and stating that such notice is a "Notice of Default" hereunder; or

          (6) a default under any Indebtedness for money borrowed by the Company
     or  any  Subsidiary  of  the  Company;  provided  that  such  Indebtedness,
     individually or in the aggregate,  has an aggregate  principal  amount then
     outstanding  in excess of $5 million  (or the  equivalent  thereof in other
     currencies or currency units) whether such Indebtedness now exists or shall
     hereafter be created,  which default shall  constitute a failure to pay any
     portion of the  principal of such  Indebtedness  when due and payable after
     the expiration of any applicable grace period with respect thereto or shall
     have  resulted  in such  Indebtedness  becoming or being  declared  due and
     payable prior to the date on which it would  otherwise  have become due and
     payable,  without  such  Indebtedness  having  been  discharged,   or  such
     acceleration having been rescinded or annulled,  within a period of 10 days
     after there shall have been given,  by registered or certified mail, to the
     Company by the  Trustee or to the Company and the Trustee by the Holders of
     at least 10% in principal  amount of the  Outstanding  Securities a written
     notice  specifying  such  default and  requiring  the Company to cause such
     Indebtedness to be discharged or cause such acceleration to be rescinded or
     annulled and stating  that such notice is a "Notice of Default"  hereunder;
     or

          (7) the entry by a court  having  jurisdiction  in the  premises  of a
     final judgment or order (not subject to appeal)  against the Company or any
     of its  Subsidiaries in excess of $5 million (or the equivalent  thereof in
     other  currencies  or currency  units)  individually  or $5 million (or the
     equivalent  thereof in other currencies or currency units) in the aggregate
     of all such Persons which remains  undischarged or unbonded for a period of
     60 days thereafter; or

          (8) the entry by a court having  jurisdiction in the premises of (A) a
     decree or order for relief in respect of the Company or any  Subsidiary  of
     the  Company in an  involuntary  case or  proceeding  under any  applicable
     bankruptcy,  insolvency,  reorganization  or other similar law of Mexico or
     the United States of America or any political  subdivision thereof or (B) a
     decree or order  adjudging the Company or any such Subsidiary a bankrupt or
     insolvent,   or   approving   as   properly   filed  a   petition   seeking
     reorganization,  arrangement, adjustment or composition of or in respect of
     the Company or any such  Subsidiary  under any  applicable law of Mexico or
     the United  States of  America or any  political  subdivision  thereof,  or
     appointing   a  custodian,   receiver,   liquidator,   assignee,   trustee,
     sequestrator  or  other  similar  official  of  the  Company  or  any  such
     Subsidiary or of any substantial part of the property of the Company or any
     such  Subsidiary,  or ordering the winding up or liquidation of the affairs
     of the Company or any

                                      -36-
<PAGE>

     such Subsidiary, and the continuance of any such decree or order for relief
     or any such other decree or order unstayed and in effect for a period of 15
     consecutive days; or

          (9) the  commencement  by the Company or any of its  Subsidiaries of a
     voluntary case or proceeding under any applicable  bankruptcy,  insolvency,
     reorganization  or other  similar  law of  Mexico or the  United  States of
     America  or any  political  subdivision  thereof  or of any  other  case or
     proceeding  in any court in Mexico or the  United  States of America or any
     political subdivision thereof to be adjudicated a bankrupt or insolvent, or
     the consent by the Company or any such  Subsidiary to the entry of a decree
     or order for relief in respect of the Company or any of its Subsidiaries in
     an  involuntary  case  or  proceeding  under  any  applicable   bankruptcy,
     insolvency,  reorganization  or other  similar  law of Mexico or the United
     States  of  America  or  any  political   subdivision  thereof  or  to  the
     commencement of any bankruptcy or insolvency case or proceeding against the
     Company  or any of its  Subsidiaries  in any court in Mexico or the  United
     States of America or any political  subdivision  thereof,  or the filing by
     the Company or any of its  Subsidiaries  of a petition or answer or consent
     seeking  reorganization or relief under any applicable law of Mexico or the
     United  States of  America or any  political  subdivision  thereof,  or the
     consent  by the  Company or any of its  Subsidiaries  to the filing of such
     petition or the  appointment of or the taking of possession by a custodian,
     receiver,  liquidator,  assignee, trustee, sequestrator or similar official
     of the Company or any of its Subsidiaries or of any substantial part of the
     property  of the Company or any of its  Subsidiaries,  or the making by the
     Company or any of its  Subsidiaries  of an  assignment  for the  benefit of
     creditors,  or the admission by the Company or any of its  Subsidiaries  in
     writing of its inability to pay its debts  generally as they become due, or
     the taking of corporate action by the Company or any of its Subsidiaries in
     furtherance of any such action.

                  SECTION  502.   Acceleration   of  Maturity;   Rescission  and
Annulment.  If an Event of Default occurs and is  continuing,  then and in every
such case the Trustee or the Holders of not less than 25% in principal amount of
the Outstanding Securities may declare the principal of all the Securities to be
due and payable  immediately,  by a notice in writing to the Company (and to the
Trustee if given by Holders), and upon any such declaration such principal shall
become immediately due and payable.

                  At any time after such a declaration of acceleration  has been
made and  before a  judgment  or decree  for  payment  of the money due has been
obtained by the Trustee as hereinafter in this Article provided,  the Holders of
a majority in principal amount of the Outstanding Securities,  by written notice
to the Company and the Trustee,  may rescind and annul such  declaration and its
consequences if

                  (1) the Company has  paid or deposited with the Trustee a  sum
         sufficient to pay

                           (A) all overdue interest on all Securities,

                           (B) the principal of any Securities which have become
                  due  otherwise  than  by  such   declaration  of  acceleration
                  (including any Securities required to have

                                      -37-
<PAGE>

                  been  purchased  on  the  Purchase  Date  pursuant to an Offer
                  to  Purchase  made by the Company) and interest thereon at the
                  rate borne by the Securities,

                           (C) to the extent that payment  of such  interest  is
                  lawful,  interest  upon  overdue interest at the rate borne by
                  the Securities, and

                           (D) all  sums  paid  or   advanced   by  the  Trustee
                  hereunder  and  the  reasonable compensation,  expenses,  dis-
                  bursements  and  advances  of  the  Trustee,  its  agents  and
                  counsel; and

                  (2) all Events of Default,  other than the  nonpayment  of the
         principal  of   Securities   which  have  become  due  solely  by  such
         declaration of  acceleration,  have been cured or waived as provided in
         Section 513.

No such  rescission  shall  affect  any  subsequent  default or impair any right
consequent thereon.

                  SECTION  503. Collection   of   Indebtedness   and  Suits  for
Enforcement  by Trustee.  The Company covenants that if

                  (1)  default  is made in the  payment of any  interest  on any
Security when such interest  becomes due and payable and such default  continues
for a period of 30 days, or

                  (2)  default is made in the  payment of the  principal  of any
Security at the Maturity  thereof or, with  respect to any Security  required to
have been purchased pursuant to an Offer to Purchase made by the Company, at the
Purchase Date thereof,

the Company will, upon demand of the Trustee,  pay to it, for the benefit of the
Holders  of such  Securities,  the whole  amount  then due and  payable  on such
Securities  for principal and interest,  and, to the extent that payment of such
interest shall be legally enforceable,  interest on any overdue principal and on
any  overdue  interest,  at the rate borne by the  Securities,  and, in addition
thereto,  such  further  amount  as shall be  sufficient  to cover the costs and
expenses  of  collection,  including  the  reasonable  compensation,   expenses,
disbursements and advances of the Trustee, its agents and counsel.

                  If the Company fails to pay such amounts  forthwith  upon such
demand,  the Trustee,  in its own name and as Trustee of an express  trust,  may
institute judicial proceedings for the collection of the sums so due and unpaid,
and may prosecute such proceedings to judgment or final decree,  and may enforce
the same  against the  Company and collect the moneys  adjudged or decreed to be
payable  in the  manner  provided  by law out of the  property  of the  Company,
wherever situated.

                  If an Event of Default occurs and is  continuing,  the Trustee
may in its  discretion  proceed to protect and enforce its rights and the rights
of the Holders by such  appropriate  judicial  proceedings  as the Trustee shall
deem most  effectual  to protect and enforce  any such  rights,  whether for the
specific enforcement of any covenant or agreement in this Indenture or in aid of
the exercise of any power granted herein, or to enforce any other proper remedy.

                                      -38-
<PAGE>

                  SECTION 504.  Trustee May File Proofs of Claim. In case of any
judicial  proceeding  relative  to the Company  (or any other  obligor  upon the
Securities),  its property or its  creditors,  the Trustee shall be entitled and
empowered,  by intervention in such proceeding or otherwise, to take any and all
actions  authorized under the Trust Indenture Act in order to have claims of the
Holders and the  Trustee  allowed in any such  proceeding.  In  particular,  the
Trustee shall be authorized to collect and receive any moneys or other  property
payable or  deliverable  on any such claims and to distribute  the same; and any
custodian,  receiver,  assignee,  trustee,  liquidator,  sequestrator  or  other
similar  official in any such judicial  proceeding is hereby  authorized by each
Holder to make such  payments to the Trustee  and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders,  to pay to
the  Trustee  any  amount  due it for  the  reasonable  compensation,  expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 607.

                  No  provision of this  Indenture  shall be deemed to authorize
the  Trustee  to  authorize  or  consent  to or accept or adopt on behalf of any
Holder  any  plan of  reorganization,  arrangement,  adjustment  or  composition
affecting the Securities or the rights of any Holder thereof or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.

                  SECTION 505. Trustee May Enforce Claims Without  Possession of
Securities.  All  rights  of action  and  claims  under  this  Indenture  or the
Securities may be prosecuted and enforced by the Trustee  without the possession
of any of the  Securities or the production  thereof in any proceeding  relating
thereto,  and any such proceeding  instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
after  provision  for the  payment  of the  reasonable  compensation,  expenses,
disbursements  and advances of the Trustee,  its agents and counsel,  be for the
ratable  benefit  of the  Holders  of the  Securities  in  respect of which such
judgment has been recovered.

                  SECTION  506.  Application  of  Money  Collected.   Any  money
collected  by the  Trustee  pursuant  to this  Article  shall be  applied in the
following  order,  at the date or dates fixed by the Trustee and, in case of the
distribution   of  such  money  on  account  of  principal  or  interest,   upon
presentation  of the Securities and the notation  thereon of the payment if only
partially paid and upon surrender thereof if fully paid:

                  FIRST:  To  the  payment  of all amounts due the Trustee under
         Section 607; and

                  SECOND:  To the payment of the amounts then due and unpaid for
         principal of and interest on the  Securities in respect of which or for
         the benefit of which such money has been  collected,  ratably,  without
         preference  or priority of any kind,  according  to the amounts due and
         payable on such Securities for principal and interest, respectively.

                  SECTION 507.  Limitation  on Suits.  No Holder of any Security
shall have any right to institute any  proceeding,  judicial or otherwise,  with
respect to this Indenture,  or for the appointment of a receiver or trustee,  or
for any other remedy hereunder, unless

                                      -39-
<PAGE>

               (1) such  Holder  has  previously  given  written  notice  to the
          Trustee of a continuing Event of Default;

               (2) the Holders of not less than 25% in  principal  amount of the
          Outstanding  Securities shall have made written request to the Trustee
          to  institute  proceedings  in respect of such Event of Default in its
          own name as Trustee hereunder;

               (3) such Holder or Holders have offered to the Trustee reasonable
          indemnity  against the costs,  expenses and liabilities to be incurred
          in compliance with such request;

               (4) the  Trustee  for 60 days after its  receipt of such  notice,
          request  and  offer of  indemnity  has  failed to  institute  any such
          proceeding; and

               (5) no direction  inconsistent with such written request has been
          given to the Trustee  during  such  60-day  period by the Holders of a
          majority in principal amount of the Outstanding Securities;

it being  understood  and intended  that no one or more  Holders  shall have any
right in any manner  whatever by virtue of, or by availing of, any  provision of
this Indenture to affect,  disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain  priority or preference over any other Holders
or to enforce  any right  under  this  Indenture,  except in the  manner  herein
provided and for the equal and ratable benefit of all the Holders.

                  SECTION  508.   Unconditional  Right  of  Holders  to  Receive
Principal and Interest.  Notwithstanding  any other provision in this Indenture,
the  Holder  of any  Security  shall  have  the  right,  which is  absolute  and
unconditional,  to receive  payment of the  principal of and (subject to Section
307) interest on such Security on the respective Stated Maturities  expressed in
such Security (or, in the case of redemption,  on the Redemption  Date or in the
case of an Offer to Purchase  made by the Company and required to be accepted as
to  such  Security,  on  the  Purchase  Date)  and to  institute  suit  for  the
enforcement of any such payment,  and such rights shall not be impaired  without
the consent of such Holder.

                  SECTION  509.  Restoration  of  Rights  and  Remedies.  If the
Trustee or any Holder has  instituted  any  proceeding  to enforce  any right or
remedy  under  this  Indenture  and such  proceeding  has been  discontinued  or
abandoned for any reason, or has been determined  adversely to the Trustee or to
such Holder,  then and in every such case,  subject to any determination in such
proceeding, the Company, the Trustee and the Holders shall be restored severally
and respectively to their former  positions  hereunder and thereafter all rights
and  remedies of the Trustee  and the Holders  shall  continue as though no such
proceeding had been instituted.

                  SECTION  510.  Rights  and  Remedies  Cumulative.   Except  as
otherwise  provided  with respect to the  replacement  or payment of  mutilated,
destroyed,  lost or stolen  Securities in the last  paragraph of Section 306, no
right or remedy  herein  conferred  upon or  reserved  to the  Trustee or to the
Holders is intended  to be  exclusive  of any other  right or remedy,  and every
right and remedy shall,  to the extent  permitted by law, be  cumulative  and in
addition to every other right and remedy  given  hereunder  or now or  hereafter
existing at law or in equity or otherwise.

                                      -40-
<PAGE>

The  assertion or  employment  of any right or remedy  hereunder,  or otherwise,
shall  not  prevent  the  concurrent   assertion  or  employment  of  any  other
appropriate right or remedy.

                  SECTION  511.  Delay  or  Omission  Not  Waiver.  No  delay or
omission of the Trustee or of any Holder of any  Security to exercise  any right
or remedy  accruing  upon any Event of  Default  shall  impair any such right or
remedy or  constitute  a waiver of any such Event of Default or an  acquiescence
therein.  Every right and remedy  given by this Article or by law to the Trustee
or to the Holders  may be  exercised  from time to time,  and as often as may be
deemed expedient, by the Trustee or by the Holders, as the case may be.

                  SECTION 512. Control by Holders.  The Holders of a majority in
principal  amount of the Outstanding  Securities  shall have the right to direct
the time, method and place of conducting any proceeding for any remedy available
to the  Trustee  or  exercising  any trust or power  conferred  on the  Trustee,
provided that

               (1) such direction  shall not be in conflict with any rule of law
          or with this Indenture;

               (2) the Trustee need not take any action  which might  involve it
          in personal  liability or be unjustly  prejudicial  to the Holders not
          taking part in such action; and

               (3) the Trustee may take any other  action  deemed  proper by the
          Trustee which is not inconsistent with such direction.

                  SECTION 513. Waiver of Past Defaults.  The Holders of not less
than a majority in principal amount of the Outstanding  Securities may on behalf
of the Holders of all the  Securities  waive any past default  hereunder and its
consequences, except a default

               (1) in  the  payment  of  the  principal  of or  interest  on any
          Security  (including  any  Security  which is  required  to have  been
          purchased  pursuant to an Offer to Purchase which has been made by the
          Company), or

               (2) in respect of a covenant  or  provision  hereof  which  under
          Article Nine cannot be modified or amended  without the consent of the
          Holder of each Outstanding Security affected.

                  Upon any such waiver,  such default shall cease to exist,  and
any Event of Default arising  therefrom shall be deemed to have been cured,  for
every  purpose  of  this  Indenture;  but no such  waiver  shall  extend  to any
subsequent or other default or impair any right consequent thereon.

                  SECTION  514.  Undertaking  for  Costs.  In any  suit  for the
enforcement of any right or remedy under this Indenture,  or in any suit against
the Trustee for any action taken,  suffered or omitted by it as Trustee, a court
may require any party  litigant in such suit to file an  undertaking  to pay the
costs of such suit, and may assess costs against any such party litigant, in the
manner and to the extent  provided in the Trust  Indenture  Act;  provided  that
neither this

                                      -41-
<PAGE>

Section nor the Trust  Indenture  Act shall be deemed to authorize  any court to
require such an undertaking or to make such an assessment in any suit instituted
by the Holders or the Trustee.

                  SECTION  515.  Waiver of Stay or Extension  Laws.  The Company
covenants  (to the extent  that it may  lawfully  do so) that it will not at any
time  insist  upon,  or plead,  or in any  manner  whatsoever  claim or take the
benefit or advantage of, any stay or extension law wherever  enacted,  now or at
any time hereafter in force,  which may affect the covenants or the  performance
of this  Indenture;  and the Company (to the extent that it may  lawfully do so)
hereby  expressly  waives all benefit or advantage of any such law and covenants
that it will not  hinder,  delay or impede  the  execution  of any power  herein
granted to the Trustee,  but will suffer and permit the  execution of every such
power as though no such law had been enacted.


                                   ARTICLE SIX

                                   THE TRUSTEE

                  SECTION 601. Certain Duties and  Responsibilities.  The duties
and  responsibilities of the Trustee shall be as provided by the Trust Indenture
Act. Notwithstanding the foregoing, no provision of this Indenture shall require
the  Trustee to expend or risk its own funds or  otherwise  incur any  financial
liability in the performance of any of its duties hereunder,  or in the exercise
of any of its  rights  or  powers,  if it  shall  have  reasonable  grounds  for
believing that repayment of such funds or adequate  indemnity  against such risk
or liability is not reasonably  assured to it. Whether or not therein  expressly
so  provided,  every  provision  of this  Indenture  relating  to the conduct or
affecting  the  liability of or  affording  protection  to the Trustee  shall be
subject to the provisions of this Section.

                  SECTION 602.  Notice of Defaults.  The Trustee  shall give the
Holders  notice of any default  hereunder  as and to the extent  provided by the
Trust Indenture Act; provided,  however,  that in the case of any default of the
character  specified in Section 501(5), no such notice to Holders shall be given
until at least 30 days after the  occurrence  thereof.  For the  purpose of this
Section,  the term "default"  means any event which is, or after notice or lapse
of time or both would become, an Event of Default.

                  SECTION  603.  Certain  Rights  of  Trustee.  Subject  to  the
provisions of Section 601:

                  (a) the Trustee may rely and shall be  protected  in acting or
         refraining  from acting upon any  resolution,  certificate,  statement,
         instrument,  opinion,  report,  notice,  request,  direction,  consent,
         order, bond,  debenture,  note, other evidence of indebtedness or other
         paper or document  believed by it to be genuine and to have been signed
         or presented by the proper party or parties;

                  (b) any request or direction of the Company  mentioned  herein
         shall be  sufficiently  evidenced by a Company Request or Company Order
         and any  resolution  of the  Board  of  Directors  may be  sufficiently
         evidenced by a Board Resolution;

                                      -42-
<PAGE>

                  (c)  whenever  in the  administration  of this  Indenture  the
         Trustee shall deem it desirable  that a matter be proved or established
         prior to  taking,  suffering  or  omitting  any action  hereunder,  the
         Trustee (unless other evidence be herein specifically  prescribed) may,
         in the  absence  of bad  faith  on its  part,  rely  upon an  Officers'
         Certificate;

                  (d) the Trustee may consult with counsel of its  selection and
         the written advice of such counsel,  any Opinion of Mexican  Counsel or
         any Opinion of U.S.  Counsel  shall be full and complete  authorization
         and  protection in respect of any action taken,  suffered or omitted by
         it hereunder in good faith and in reliance thereon;

                  (e) the Trustee  shall be under no  obligation to exercise any
         of the rights or powers  vested in it by this  Indenture at the request
         or direction of any of the Holders  pursuant to this Indenture,  unless
         such Holders shall have offered to the Trustee  reasonable  security or
         indemnity  against the costs,  expenses and liabilities  which might be
         incurred by it in compliance with such request or direction;

                  (f) the Trustee  shall not be bound to make any  investigation
         into the  facts  or  matters  stated  in any  resolution,  certificate,
         statement,  instrument,  opinion,  report, notice, request,  direction,
         consent,  order, bond, debenture,  note, other evidence of indebtedness
         or other paper or document,  but the Trustee,  in its  discretion,  may
         make such further inquiry or  investigation  into such facts or matters
         as it may see fit,  and, if the Trustee  shall  determine  to make such
         further inquiry or  investigation,  it shall be entitled to examine the
         books,  records and premises of the Company,  personally or by agent or
         attorney;

                  (g) the  Trustee  may  execute  any of the  Trusts  or  powers
         hereunder  or perform  any duties  hereunder  either  directly or by or
         through  agents or attorneys and the Trustee  shall not be  responsible
         for any  misconduct  or negligence on the part of any agent or attorney
         appointed with due care by it hereunder; and

                  (h) the  Trustee  shall not be liable  for any  action  taken,
         suffered,  or omitted  to be taken by it in good  faith and  reasonably
         believed by it to be authorized  or within the  discretion or rights or
         powers conferred upon it by this Indenture.

                  SECTION  604.  Not  Responsible  for  Recitals  or Issuance of
Securities.  The recitals  contained  herein and in the  Securities,  except the
Trustee's  certificates of  authentication,  shall be taken as the statements of
the Company,  and the Trustee assumes no responsibility  for their  correctness.
The Trustee makes no  representations  as to the validity or sufficiency of this
Indenture or of the Securities. The Trustee shall not be accountable for the use
or application by the Company of Securities or the proceeds thereof.

                  SECTION 605.  May Hold  Securities.  The  Trustee,  any Paying
Agent,  any  Security  Registrar  or any  other  agent  of the  Company,  in its
individual or any other capacity,  may become the owner or pledgee of Securities
and,  subject to Sections 608 and 613, may otherwise  deal with the Company with
the same rights it would have if it were not  Trustee,  Paying  Agent,  Security
Registrar or such other agent.

                                      -43-
<PAGE>

                  SECTION 606. Money Held in Trust. Money held by the Trustee in
trust  hereunder  need not be  segregated  from other funds except to the extent
required by law.  The Trustee  shall be under no  liability  for interest on any
money  received by it hereunder  except as otherwise  agreed in writing with the
Company.

                  SECTION 607. Compensation  and  Reimbursement.   The   Company
agrees

                    (1)  to  pay  to  the   Trustee   from  time  to  time  such
               compensation  as shall be agreed in writing  between  the Company
               and the Trustee for all services  rendered by it hereunder (which
               compensation  shall not be  limited  by any  provision  of law in
               regard to the compensation of a trustee of an express trust);

                    (2)  except  as  otherwise  expressly  provided  herein,  to
               reimburse  the  Trustee  upon  its  request  for  all  reasonable
               expenses,  disbursements  and  advances  incurred  or made by the
               Trustee  in  accordance  with  any  provision  of this  Indenture
               (including  the  reasonable  compensation  and the  expenses  and
               disbursements  of  its  agents  and  counsel),  except  any  such
               expense,  disbursement  or advance as may be  attributable to its
               negligence or bad faith; and

                    (3) to  indemnify  each of the Trustee  and any  predecessor
               trustee for, and to hold it harmless  against,  any and all loss,
               liability,  damage, claim or expense, including taxes (other than
               taxes  based on the  income  of the  Trustee),  incurred  without
               negligence  or  bad  faith  on  its  part,  arising  out of or in
               connection with the acceptance or  administration  of this trust,
               including the costs and expenses of defending  itself against any
               claim or liability in connection with the exercise or performance
               of any of its powers or duties hereunder.

                  The Trustee  shall have a lien prior to the  Securities  as to
all property  and funds held by it  hereunder  for any amount owing to it or any
predecessor  Trustee  pursuant to this Section 607, except with respect to funds
held in trust for the benefit of the Holders of particular Securities.

                  When the  Trustee  incurs  expenses  or  renders  services  in
connection  with an Event of  Default  specified  in  Section  501(8) or Section
501(9),  the  expenses  (including  the  reasonable  charges and expenses of its
counsel)  and the  compensation  for its  services  are  intended to  constitute
expenses of  administration  under any applicable  Federal or state  bankruptcy,
insolvency or other similar law.

                  The  provisions of this Section shall survive the  termination
of this Indenture.

                  SECTION 608.  Disqualification:  Conflicting  Interest. If the
Trustee has or shall  acquire a conflicting  interest  within the meaning of the
Trust Indenture Act, the Trustee shall either eliminate such interest or resign,
to the extent and in the manner  provided by, and subject to the  provisions of,
the Trust Indenture Act and this Indenture.

                  SECTION 609.  Corporate  Trustee  Required; Eligibility. There
shall at all  times  be a  Trustee  hereunder  which  shall be a Person  that is
eligible pursuant to the Trust Indenture Act

                                      -44-
<PAGE>

to act as such and has a combined  capital and  surplus of at least  $50,000,000
and its Corporate Trust Office in The City of New York. If such Person publishes
reports of condition at least annually,  pursuant to law or to the  requirements
of a federal or state supervising or examining authority, then, for the purposes
of this Section, the combined capital and surplus of such Person shall be deemed
to be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section,  it shall resign  immediately in
the manner and with the effect hereinafter specified in this Article.

                  SECTION  610.   Resignation   and  Removal;   Appointment   of
Successor.  (a) No resignation or removal of the Trustee and no appointment of a
successor  Trustee  pursuant to this Article  shall become  effective  until the
acceptance of appointment by the successor Trustee under Section 611.

                  (b)   The  Trustee  may  resign  at any time by giving written
notice thereof to the Company.

                  (c)  The  Trustee  may be  removed  at any  time by Act of the
Holders  of a  majority  in  principal  amount  of the  Outstanding  Securities,
delivered to the Trustee and to the Company.

                  (d)      If at any time:

                  (1) the Trustee  shall fail to comply  with  Section 608 after
         written request therefor by the Company or by any Holder who has been a
         bona fide Holder of a Security for at least six months, or

                  (2) the Trustee  shall cease to be eligible  under Section 609
         and shall fail to resign after written request  therefor by the Company
         or by any such Holder, or

                  (3) the Trustee  shall become  incapable of acting or shall be
         adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
         property  shall be appointed or any public officer shall take charge or
         control of the Trustee or of its property or affairs for the purpose of
         rehabilitation, conservation or liquidation,

then,  in any such case,  (i) the Company by a Board  Resolution  may remove the
Trustee,  or (ii)  subject to Section  514,  any Holder who has been a bona fide
Holder of a Security  for at least six months  may, on behalf of himself and all
others similarly situated,  petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.

                  (e) If an  instrument  of  acceptance  by a successor  Trustee
shall not have been  delivered to the Trustee within 30 days after the giving of
notice of  resignation  or removal,  the Trustee  resigning or being removed may
petition any court of competent  jurisdiction for the appointment of a successor
Trustee.

                  (f)  If  the  Trustee  shall  resign,  be  removed  or  become
incapable  of acting,  or if a vacancy  shall occur in the office of Trustee for
any cause, the Company, by a Board Resolution,

                                      -45-
<PAGE>

shall  promptly  appoint a  successor  Trustee.  If,  within one year after such
resignation,  removal or  incapability,  or the  occurrence of such  vacancy,  a
successor  Trustee  shall be  appointed  by Act of the  Holders of a majority in
principal amount of the Outstanding  Securities delivered to the Company and the
retiring Trustee,  the successor Trustee so appointed shall,  forthwith upon its
acceptance of such  appointment,  become the successor Trustee and supersede the
successor Trustee  appointed by the Company.  If no successor Trustee shall have
been so appointed by the Company or the Holders and accepted  appointment in the
manner  hereinafter  provided,  any Holder who has been a bona fide  Holder of a
Security  for at least six  months  may,  on behalf of  himself  and all  others
similarly  situated,  petition  any  court  of  competent  jurisdiction  for the
appointment of a successor Trustee.

                  (g) The Company shall give notice of each resignation and each
removal  of the  Trustee  and each  appointment  of a  successor  Trustee to all
Holders in the manner  provided in Section 106.  Each notice  shall  include the
name of the successor Trustee and the address of its Corporate Trust Office.

                  SECTION 611.  Acceptance of  Appointment  by Successor.  Every
successor Trustee appointed hereunder shall execute,  acknowledge and deliver to
the  Company  and  to  the  retiring   Trustee  an  instrument   accepting  such
appointment,  and thereupon the  resignation or removal of the retiring  Trustee
shall become effective and such successor Trustee, without any further act, deed
or  conveyance,  shall  become  vested with all the rights,  powers,  trusts and
duties of the retiring Trustee;  but, on request of the Company or the successor
Trustee,  such retiring Trustee shall, upon payment of its charges,  execute and
deliver an instrument  transferring  to such  successor  Trustee all the rights,
powers and trusts of the retiring  Trustee and shall duly  assign,  transfer and
deliver to such  successor  Trustee all property and money held by such retiring
Trustee hereunder. Upon request of any such successor Trustee, the Company shall
execute  any and all  instruments  for more fully and  certainly  vesting in and
confirming to such successor Trustee all such rights, powers and trusts.

                  No successor  Trustee shall accept its  appointment  unless at
the time of such  acceptance  such  successor  Trustee  shall be  qualified  and
eligible under this Article.

                  SECTION 612. Merger,  Conversion,  Consolidation or Succession
to Business.  Any corporation  into which the Trustee may be merged or converted
or with which it may be  consolidated,  or any  corporation  resulting  from any
merger,  conversion or  consolidation  to which the Trustee shall be a party, or
any  corporation  succeeding to all or  substantially  all the  corporate  trust
business  of the  Trustee,  shall be the  successor  of the  Trustee  hereunder,
provided such corporation  shall be otherwise  qualified and eligible under this
Article,  without the execution or filing of any paper or any further act on the
part of any of the  parties  hereto.  In case any  Securities  shall  have  been
authenticated,  but not delivered,  by the Trustee then in office, any Successor
by merger,  conversion or consolidation to such authenticating Trustee may adopt
such  authentication  and deliver the Securities so authenticated  with the same
effect as if such successor Trustee had itself authenticated such Securities.

                  SECTION  613.  Preferential   Collection  of  Claims   Against
Company.  If and when the  Trustee  shall be or become a creditor of the Company
(or any other obligor upon the

                                      -46-
<PAGE>

Securities),  the  Trustee  shall be  subject  to the  provisions  of the  Trust
Indenture  Act regarding  the  collection of claims  against the Company (or any
such other obligor).


                                  ARTICLE SEVEN

                           HOLDERS' LISTS AND REPORTS
                             BY TRUSTEE AND COMPANY
                             ----------------------

                  SECTION  701.  Company    to   Furnish    Trustee   Names  and
Addresses  of Holders.  The Company will furnish or cause to be furnished to the
Trustee

                  (a)  semiannually,  not more than 15 days after  each  Regular
         Record  Date,  a list,  in  such  form as the  Trustee  may  reasonably
         require,  of the names and  addresses of the Holders as of such Regular
         Record Date, and

                  (b) at such other times as the Trustee may request in writing,
         within 30 days after the receipt by the Company of any such request,  a
         list of  similar  form and  content  as of a date not more than 15 days
         prior to the time such list is furnished;

excluding from any such list names and addresses  received by the Trustee in its
capacity as Security Registrar.

                  SECTION 702.  Preservation of Information;  Communications  to
Holders.  (a) The Trustee shall preserve,  in as current a form as is reasonably
practicable,  the names and  addresses  of Holders  contained in the most recent
list  furnished  to the  Trustee as  provided  in Section  701 and the names and
addresses  of Holders  received  by the  Trustee  in its  capacity  as  Security
Registrar.  The  Trustee may  destroy  any list  furnished  to it as provided in
Section 701 upon receipt of a new list so furnished.

                  (b) The rights of Holders to  communicate  with other  Holders
with respect to their rights under this Indenture or under the  Securities,  and
the corresponding rights and duties of the Trustee,  shall be as provided by the
Trust Indenture Act.

                  (c) Every Holder of  Securities,  by receiving and holding the
same,  agrees with the Company and the Trustee  that neither the Company nor the
Trustee nor any agent of either of them shall be held  accountable  by reason of
any disclosure of information as to names and addresses of Holders made pursuant
to the Trust Indenture Act.

                  SECTION  703.  Reports  by  Trustee.  (a)  The  Trustee  shall
transmit to Holders such reports  concerning  the Trustee and its actions  under
this  Indenture as may be required  pursuant to the Trust  Indenture  Act at the
times and in the manner provided pursuant thereto. If required by Section 313(a)
of the Trust  Indenture Act, the Trustee shall,  within 60 days after each April
15  following  the date of this  Indenture,  deliver to Holders a brief  report,
dated as of such April 15, which  complies  with the  provisions of such Section
313(a).

                                      -47-
<PAGE>

                  (b) A copy of each  such  report  shall,  at the  time of such
transmission  to Holders,  be filed by the Trustee with each stock exchange upon
which the Securities are listed,  with the Commission and with the Company.  The
Company will promptly  notify the Trustee when the  Securities are listed on any
stock exchange.

                  SECTION 704.  Reports by Company.  The Company shall file with
the Trustee and the  Commission,  and  transmit  to Holders,  such  information,
documents and other  reports,  and such  summaries  thereof,  as may be required
pursuant  to the Trust  Indenture  Act at the times and in the  manner  provided
pursuant to such Act; provided that any such  information,  documents or reports
required to be filed with the Commission  pursuant to Section 13 or 15(d) of the
Exchange Act shall be filed with the Trustee within 15 days after the same is so
required to be filed with the Commission.

                  Delivery of such  reports,  information  and  documents to the
Trustee is for  informational  purposes only and the  Trustee's  receipt of such
shall not constitute constructive notice of any information contained therein or
determinable  from  information  contained  therein,   including  the  Company's
compliance  with any of its  covenants  hereunder  (as to which the  Trustee  is
entitled to rely exclusively on Officers' Certificates).


                                  ARTICLE EIGHT

                             CONSOLIDATION, MERGER,
                          CONVEYANCE, TRANSFER OR LEASE
                          -----------------------------

                  SECTION 801.  Company May  Consolidate,  Etc., Only on Certain
Terms.  The  Company  (i) shall  not  consolidate  with or merge  into any other
Person; (ii) shall not permit any other Person to consolidate with or merge into
the Company;  (iii) shall not directly or  indirectly  transfer,  convey,  sell,
lease or otherwise  dispose of all or  substantially  all of its  properties and
assets as an entirety;  or (iv) shall not,  and shall not permit any  Subsidiary
to,  directly or indirectly (a) acquire the Capital Stock of or other  ownership
interests of any other Person such that such Person  becomes a Subsidiary of the
Company or (b) purchase,  lease or otherwise acquire all or substantially all of
the property  and assets of any Person as an entirety or any  existing  business
(whether existing as a separate entity, subsidiary, division, unit or otherwise)
of any Person, unless:

                  (1)  immediately  before  and  after  giving  effect  to  such
         transaction and treating any Indebtedness  Incurred by the Company or a
         Subsidiary  of the  Company as a result of such  transaction  as having
         been  Incurred  by the Company or such  Subsidiary  at the time of such
         transaction,  no Event of Default,  and no event which, after notice or
         lapse of time,  or both,  would become an Event of Default,  would have
         occurred and be continuing;

                  (2) in case  the  Company  consolidates  with or  merges  into
         another Person or will directly or indirectly  transfer,  convey, sell,
         lease  or  otherwise  dispose  of  all  or  substantially  all  of  its
         properties  and  assets  as an  entirety,  the  Person  formed  by such
         consolidation  or into which the Company is merged or the Person  which
         acquires by

                                      -48-
<PAGE>

         transfer,   conveyance,   sale,  lease  or  other  disposition  all  or
         substantially  all of the  properties  and assets of the  Company as an
         entirety (for purposes of this Section 801, a "Successor Company") will
         be a corporation,  partnership or trust,  will be organized and validly
         existing under the laws of Mexico or the United States or any political
         subdivision  thereof  and  will  expressly  assume  by  a  supplemental
         indenture  executed and delivered to the Trustee,  in form satisfactory
         to the Trustee,  the due and punctual  payment of the  principal of and
         interest on all the Securities and the performance of every covenant of
         this Indenture on the part of the Company to be performed or observed;

                  (3) immediately after giving effect to such transaction (other
         than a transaction  described in (iv) above), the Consolidated Tangible
         Net Worth of the Company or, if applicable, the Successor Company, will
         be equal to or greater am the  Consolidated  Tangible  Net Worth of the
         Company immediately prior to such transaction;

                  (4) immediately after giving effect to such  transaction,  and
         treating any Indebtedness  Incurred by the Company or any Subsidiary of
         the Company as a result of such  transaction as having been Incurred at
         the  time of such  transaction,  the  Interest  Coverage  Ratio  of the
         Company or the Successor  Company is at least 1.1:1, or, if less, equal
         to the Interest Coverage Ratio of the Company immediately prior to such
         transaction;  provided  that,  if the  Interest  Coverage  Ratio of the
         Company  before giving effect to such  transaction  is within the range
         set forth in column (A)  below,  then the pro forma  Interest  Coverage
         Ratio of the Company or the  Successor  Company shall be at least equal
         to the lesser of (i) the ratio determined by multiplying the percentage
         set forth in column  (B) below by the  Interest  Coverage  Ratio of the
         Company  prior to such  transaction  and (ii) the  ratio  set  forth in
         column (C) below:

<TABLE>
<CAPTION>
                  (A)                                                           (B)              (C)
                  
                                                           <c>              <c>
                  1.11:1 to............................................         90%              1.75:1
                  1.99:1

                  2.00:1 to............................................         80%              2.10:1
                  2.99:1

                  3.00:1 to............................................         70%              2.40:1
                  3.99:1

                  4.00:1 to............................................         60%              2.50:1
                  4.99:1
</TABLE>

         and provided further that, if the pro forma Interest  Coverage Ratio of
         the Company or the Successor  Company is 2.5:1 or more, the calculation
         in the preceding  proviso shall be  inapplicable  and such  transaction
         shall be deemed to have complied with the  requirements  of this clause
         (4); and

                  (5) if, as a  result  of  any  such   transaction,    property
         and  assets of the  Company  or  any  Subsidiary  of  the Company would
         become subject to a Lien which would not be

                                      -49-
<PAGE>

         permitted  by  this  Indenture,   the  Company  or, if  applicable, the
         the Successor Company, as the case may be, will take such steps as will
         be necessary  effectively to secure the Securities  equally and ratably
         with (or prior to) the Indebtedness secured by such Lien.

                  SECTION 802. Successor Substituted.  Upon any consolidation of
the  Company  with,  or  merger of the  Company  into,  any other  Person or any
conveyance,  transfer  or lease of the  properties  and  assets  of the  Company
substantially  as an entirety in  accordance  with Section  801,  the  successor
Person  formed by such  consolidation  or into which the Company is merged or to
which  such  conveyance,  transfer  or lease is made  shall  succeed  to, and be
substituted  for,  and may exercise  every right and power of the Company  under
this Indenture  with the same effect as if such successor  Person had been named
as the  Company  herein,  and  thereafter,  except  in the case of a lease,  the
predecessor Person shall be relieved of all obligations and covenants under this
Indenture and the Securities.


                                  ARTICLE NINE

                             SUPPLEMENTAL INDENTURES
                             -----------------------

                  SECTION  901.  Supplemental   Indentures  Without  Consent  of
Holders.  Without the consent of any Holders, the Company,  when authorized by a
Board Resolution,  and the Trustee, at any time and from time to time, may enter
into one or more indentures  supplemental  hereto,  in form  satisfactory to the
Trustee, for any of the following purposes:

                    (1) to  evidence  the  succession  of another  Person to the
               Company and the assumption by any such successor of the covenants
               and obligations of the Company herein and in the Securities; or

                    (2) to add to the  covenants  of the Company for the benefit
               of the  Holders,  or to  surrender  any  right  or  power  herein
               conferred upon the Company; or

                    (3) to provide for uncertificated  Securities in addition to
               or  in  place  of  certificated  Securities  (provided  that  the
               uncertificated  Securities  are  issued  in  registered  form for
               purposes of Section  163(f) of the Code, or in a manner such that
               the   uncertificated   Securities   are   described   in  Section
               163(f)(2)(B) of the Code); or

                    (4) to confirm and evidence the release and discharge of any
               Lien  created for the  benefit of the Holders no longer  required
               pursuant to Section 1013; or

                    (5) to comply  with any  requirement  of the  Commission  in
               connection  with the  qualification  of this Indenture  under the
               Trust Indenture Act or otherwise; or

                    (6) to secure the Securities; or

                    (7) to cure any  ambiguity,  error,  defective  provision or
               inconsistency,  to cure,  correct  or  supplement  any  provision
               herein which may be inconsistent with any other provision herein,
               or to make any  other  provisions  with  respect  to  matters  or
               questions

                                      -50-
<PAGE>

               arising under this Indenture,  provided that such action pursuant
               to this clause (4) shall not  adversely  affect the  interests of
               the Holders in any material respect.

                  SECTION 902. Supplemental  Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in principal  amount
of the Outstanding  Securities,  by Act of said Holders delivered to the Company
and the Trustee,  the Company,  when authorized by a Board  Resolution,  and the
Trustee may enter into an indenture or  indentures  supplemental  hereto for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the  provisions of this Indenture or of modifying in any manner the rights of
the Holders under this Indenture;  provided,  however, that no such supplemental
indenture shall,  without the consent of the Holder of each Outstanding Security
affected thereby,

               (1)  change  the  Stated  Maturity  of the  principal  of, or any
          installment  of interest  on, any  Security,  or reduce the  principal
          amount thereof or the rate of interest thereon, or change the place of
          payment where, or the coin or currency in which any Security, interest
          or  premium,  if any,  thereon  is  payable,  or  impair  the right to
          institute suit for the enforcement of any such payment on or after the
          Stated  Maturity  thereof (or, in the case of redemption,  on or after
          the Redemption  Date or, in the case of an Offer to Purchase which has
          been made, on or after the applicable Purchase Date), or

               (2) reduce the percentage in principal  amount of the Outstanding
          Securities,  the  consent of whose  Holders is  required  for any such
          supplemental  indenture,  or the consent of whose  Holders is required
          for any waiver of compliance with certain provisions of this Indenture
          or certain defaults hereunder and their  consequences  provided for in
          this Indenture, or

               (3) modify any of the provisions of this Section,  Section 513 or
          Section  1020,  except to increase any such  percentage  or to provide
          that certain other  provisions of this Indenture cannot be modified or
          waived without the consent of the Holder of each Outstanding  Security
          affected thereby, or

               (4) following the mailing of an Offer with respect to an Offer to
          Purchase  pursuant to Section 1015 or 1016,  modify the  provisions of
          this  Indenture  with  respect to such Offer to  Purchase  in a manner
          adverse to such Holder.

                  It shall not be  necessary  for any Act of Holders  under this
Section to approve the particular form of any proposed  supplemental  indenture,
but it shall be sufficient if such Act shall approve the substance thereof.

                  SECTION  903.   Execution  of  Supplemental   Indentures.   In
executing,  or accepting  the  additional  trusts  created by, any  supplemental
indenture  permitted by this Article or the modifications  thereby of the trusts
created by this  Indenture,  the  Trustee  shall be  entitled  to  receive,  and
(subject to Section 601) shall be fully protected in relying upon, an Opinion of
Mexican  Counsel and an Opinion of U.S.  Counsel  stating that the  execution of
such  supplemental  indenture is authorized or permitted by this Indenture.  The
Trustee may, but shall not be

                                      -51-
<PAGE>

obligated  to,  enter into any such  supplemental  indenture  which  affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.

                  SECTION  904.  Effect  of  Supplemental  Indentures.  Upon the
execution of any supplemental indenture under this Article, this Indenture shall
be modified in accordance therewith,  and such supplemental indenture shall form
a part of this  Indenture  for all  purposes;  and every  Holder  of  Securities
theretofore or thereafter  authenticated and delivered  hereunder shall be bound
thereby.

                  SECTION  905.  Conformity  with  Trust  Indenture  Act.  Every
supplemental  indenture  executed  pursuant to this Article shall conform to the
requirements of the Trust Indenture Act.

                  SECTION  906.   Reference  in   Securities   to   Supplemental
Indentures.  Securities  authenticated  and delivered after the execution of any
supplemental  indenture  pursuant to this  Article may, and shall if required by
the  Trustee,  bear a notation in form  approved by the Trustee as to any matter
provided for in such supplemental  indenture. If the Company shall so determine,
new Securities so modified as to conform,  in the opinion of the Trustee and the
Company, to any such supplemental  indenture may be prepared and executed by the
Company  and  authenticated  and  delivered  by  the  Trustee  in  exchange  for
Outstanding Securities.

                  SECTION 907. Notice of Supplemental Indentures. Promptly after
the effective  date of each  supplemental  indenture,  the Company shall mail or
shall cause to be mailed to Holders a notice briefly describing the substance of
such  supplemental  indenture;  provided that the failure to give such notice to
any Holder,  or any defect  therein,  will not impair or affect the  validity or
such supplemental indenture.


                                   ARTICLE TEN

                                    COVENANTS
                                    ---------

                  SECTION 1001.  Payment of Principal and Interest.  The Company
will duly and  punctually pay the principal of and interest on the Securities in
accordance with the terms of the Securities and this Indenture.

                  SECTION  1002.  Maintenance  of Office or Agency.  The Company
will maintain in The City of New York an office or agency where  Securities  may
be presented or surrendered for payment, where Securities may be surrendered for
registration  of transfer or exchange  and where  notices and demands to or upon
the Company in respect of the Securities  and this Indenture may be served.  The
Company will give prompt written notice to the Trustee of the location,  and any
change in the  location,  of such  office or agency.  If at any time the Company
shall  fail to  maintain  any such  required  office or agency or shall  fail to
furnish the Trustee with the address thereof,  such  presentations,  surrenders,
notices and demands may be made or served at the  Corporate  Trust Office of the
Trustee, and the Company hereby appoints the Trustee as its agent to receive all
such presentations, surrenders, notices and demands.

                                      -52-
<PAGE>

                  The Company may also from time to time  designate  one or more
other offices or agencies (in or outside the Borough of Manhattan in The City of
New York) where the Securities  may be presented or  surrendered  for any or all
such purposes and may from time to time rescind such  designations.  The Company
will give  prompt  written  notice to the  Trustee  of any such  designation  or
rescission and of any change in the location of any such other office or agency.

                  SECTION 1003. Money for Security Payments to Be Held in Trust.
If the Company  shall at any time act as its own Paying  Agent,  it will,  on or
before each due date of the  principal of or interest on any of the  Securities,
segregate  and hold in trust for the benefit of the Persons  entitled  thereto a
sum  sufficient to pay the principal or interest so becoming due until such sums
shall be paid to such  Persons or otherwise  disposed of as herein  provided and
will promptly notify the Trustee of its action or failure so to act.

                  Whenever the Company shall have one or more Paying Agents,  it
will,  prior to each due date of the principal of or interest on any Securities,
deposit with a Paying Agent a sum sufficient to pay such amount,  such sum to be
held as provided by the Trust  Indenture  Act,  and (unless such Paying Agent is
the  Trustee)  the  Company  will  promptly  notify the Trustee of its action or
failure so to act.

                  The  Company  will  cause  each  Paying  Agent  other than the
Trustee to execute and deliver to the Trustee an instrument in which such Paying
Agent shall agree with the Trustee,  subject to the  provisions of this Section,
that  such  Paying  Agent  will (i)  comply  with the  provisions  of the  Trust
Indenture Act applicable to it as a Paying Agent and (ii) during the continuance
of any default by the Company (or any other obligor upon the  Securities) in the
making of any payment in respect of the Securities,  upon the written request of
the Trustee,  forthwith pay to the Trustee all sums held in trust by such Paying
Agent as such.

                  The Company may at any time,  for the purpose of obtaining the
satisfaction  and discharge of this Indenture or for any other purpose,  pay, or
by Company order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying  Agent,  such sums to be held by the Trustee
upon the same  trusts as those upon which such sums were held by the  Company or
such Paying  Agent;  and,  upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further  liability  with respect to
such money.

                  Any money  deposited with the Trustee or any Paying Agent,  or
then  held by the  Company,  in trust for the  payment  of the  principal  of or
interest  on any  Security  and  remaining  unclaimed  for two years  after such
principal or interest has become due and payable shall be paid to the Company on
Company Request,  or (if then held by the Company) shall be discharged from such
trust; and the Holder of such Security shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Company as trustee  thereof,  shall thereupon cease;  provided,  however,
that the Trustee or such Paying  Agent,  before being  required to make any such
repayment,  may at the expense of the Company  cause to be published  once, in a
newspaper  published  in the English  language,  customarily  published  on each
Business  Day and of general  circulation  in The City of New York,  notice that
such money remains unclaimed and that,

                                      -53-
<PAGE>

after a date  specified  therein,  which shall not be less than 30 days from the
date of such  publication,  any unclaimed  balance of such money then  remaining
will be repaid to the Company.

                  SECTION 1004. Statement by Officers as to Default. The Company
will  deliver to the  Trustee,  within 60 days after the end of each January and
June ending after the date hereof, an Officers' Certificate,  stating whether or
not to the best  knowledge  of the signers  thereof the Company is in default in
the performance and observance of any of the terms, provisions and conditions of
this Indenture  (without  regard to any period of grace or requirement of notice
provided hereunder) and, if the Company shall be in default, specifying all such
defaults and the nature and status thereof of which they may have knowledge.

                  SECTION 1005. Existence. Subject to Article Eight, the Company
will do or cause to be done all things  necessary  to preserve  and keep in full
force and effect its existence,  rights  (charter and statutory) and franchises;
provided,  however,  that the Company shall not be required to preserve any such
right or franchise if the Company shall determine that the preservation  thereof
is no longer  desirable  in the conduct of the  business of the Company and that
the loss thereof is not disadvantageous in any material respect to the Holders.

                  SECTION  1006.  Maintenance  of  Properties.  The Company will
cause all properties  material to the conduct of its business or the business of
any Subsidiary to be maintained and kept in good  condition,  repair and working
order and supplied  with all  necessary  equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof,
all as in the  judgment  of the Company may be  necessary  so that the  business
carried on in connection therewith may be properly and advantageously  conducted
at all times; provided,  however, that nothing in this Section shall prevent the
Company  from  discontinuing  the  operation  or  maintenance  of  any  of  such
properties if such discontinuance is, in the judgment of the Company,  desirable
in the  conduct  of its  business  or the  business  of any  Subsidiary  and not
disadvantageous in any material respect to the Holders.

                  SECTION 1007.  Payment of Taxes and Other Claims.  The Company
will pay or discharge or cause to be paid or  discharged,  before the same shall
become delinquent,  (1) all material taxes, assessments and governmental charges
levied or imposed upon the Company or any Subsidiary or upon the income, profits
or property of the Company or any Subsidiary, and (2) all lawful material claims
for labor,  materials and supplies which, if unpaid,  might by law become a lien
upon the property of the Company or any Subsidiary;  provided, however, that the
Company  shall  not be  required  to pay or  discharge  or  cause  to be paid or
discharged any such tax, assessment, charge or claim whose amount, applicability
or validity is being contested in good faith by appropriate  proceedings and for
which a reserve is being maintained in accordance with Mexican GAAP.

                  SECTION 1008. Limitation on Indebtedness. The Company will not
Incur any Indebtedness  (other than the  Securities);  provided that the Company
may  Incur  Indebtedness  if,  after  giving  effect to the  Incurrence  of such
Indebtedness  and the receipt and  application  of the proceeds  therefrom,  the
Interest  Coverage  Ratio  of the  Company  would  be  greater  than or equal to
3.5:1.00.

                                      -54-
<PAGE>

                  Notwithstanding the foregoing,  the Company may Incur each and
all of the following:  (i)  Indebtedness in an aggregate  principal amount which
does not  exceed  $200  million,  less the  aggregate  principal  amount  of all
Indebtedness Incurred and outstanding by Subsidiaries of the Company pursuant to
Section  1011(ii)(e),  it being  understood  that, as of the Issue Date,  $119.4
million aggregate  principal amount of Indebtedness  (which  Indebtedness is set
forth on a  schedule  to the  Indenture)  shall be deemed to have been  Incurred
pursuant  to this  clause (i) after the Issue  Date;  (ii)  Indebtedness  of the
Company to any of its Subsidiaries;  (iii)  Indebtedness  Incurred in respect of
performance  bonds,  bankers'  acceptances and letters of credit provided in the
ordinary course of business, provided that the aggregate principal amount of all
Indebtedness  Incurred pursuant to this clause (iii) and Section 1011(ii)(c) and
outstanding  at any one time does not  exceed  $10  million;  (iv)  Indebtedness
Incurred under Currency Agreements and Interest Rate Agreements,  provided that,
in the case of  Currency  Agreements  that  relate to other  Indebtedness,  such
Currency  Agreements do not increase the Indebtedness of the Company outstanding
at any time other than as a result of fluctuations in foreign currency  exchange
rates;  (v)  Acquired  Indebtedness,  provided  that at the  time of  Incurrence
thereof  the  Company  could  Incur at least  $1.00 of  Indebtedness  under  the
preceding  paragraph;  (vi)  Indebtedness  in respect of surety or appeal bonds;
(vii)  Indebtedness  not  otherwise  permitted to be Incurred  under this or the
preceding  paragraph,  provided  that  the  aggregate  principal  amount  of all
Indebtedness  Incurred pursuant to this clause (vii) does not exceed $20 million
outstanding at any one time; and (viii) Indebtedness  Incurred to renew, extend,
refinance or refund,  directly or indirectly,  the Securities,  any Indebtedness
outstanding  on the Issue  Date that was not  repaid  with the  proceeds  of the
Securities  issued  hereunder or any  Indebtedness  Incurred  pursuant to clause
(iii) or (v) above,  provided,  however,  that such Indebtedness does not exceed
the principal amount of such Securities,  any such  Indebtedness  outstanding on
the Issue Date or any such Indebtedness Incurred pursuant to clause (iii) or (v)
above being renewed, extended,  refinanced or refunded, as the case may be, plus
costs and  expenses  ordinarily  and  customarily  incurred  upon such  renewal,
extension, refinancing or refunding; provided further that if Indebtedness being
renewed, extended,  refinanced or refunded is subordinate in right of payment to
the Securities,  such  Indebtedness  must be subordinated in right of payment to
the Securities to the same extent;  and provided further that such  Indebtedness
by its terms or by the terms of any  agreement or  instrument  pursuant to which
such  Indebtedness is issued,  (x) does not provide for payments of principal of
such  Indebtedness  at the stated  maturity  thereof or by way of any  mandatory
redemption,  defeasance,  retirement or repurchase thereof by the Company or any
Subsidiary of the Company  (including any  redemption,  retirement or repurchase
which is contingent upon events or  circumstances,  but excluding any retirement
required by virtue of acceleration of such Indebtedness upon an event of default
thereunder),  (A) in the case of Indebtedness  being Incurred to renew,  extend,
refinance or refund a portion of the Securities, prior to the Stated Maturity of
the Securities or (B) in the case of Indebtedness  outstanding on the Issue Date
being renewed,  extended,  refinanced or refunded pursuant to this clause (viii)
which has a stated  maturity  subsequent  to the Stated  Maturity  of the Notes,
prior to the Stated Maturity of the Notes, and (y) does not permit redemption or
other retirement (including pursuant to an offer to purchase made by the Company
or any Subsidiary of the Company) which is conditioned  upon a change of control
of the Company  unless such  redemption  or retirement is pursuant to provisions
substantially similar to those described in Section 1016.

                                      -55-
<PAGE>

                  SECTION 1009.  Limitation on Restricted Payments.  The Company
will not,  and will not permit any  Subsidiary  of the Company  to,  directly or
indirectly,  (i)  declare or pay any  dividend or make any  distribution  on its
Capital Stock (other than dividends or distributions payable solely in shares of
its or such Subsidiary's Capital Stock (other than Redeemable Stock) of the same
relative  priority in  liquidation  and with respect to  dividends  held by such
holders  or in  options,  warrants  or other  rights to acquire  such  shares of
Capital  Stock) held by Persons  other than the Company or a  Subsidiary  of the
Company, (ii) purchase, redeem, retire or otherwise acquire for value any shares
of Capital  Stock of the Company or any  Subsidiary  of the  Company  (including
options,  warrants or other rights to acquire such shares of Capital Stock) held
by Persons  other than the Company or a  Substantially-Owned  Subsidiary  of the
Company other than in exchange for shares of Capital Stock of the Company (other
than  Redeemable  Stock) or options,  warrants or other  rights to acquire  such
shares of Capital Stock, (iii) make any voluntary or optional principal payment,
or  voluntary  or  optional  redemption,   repurchase,   defeasance,   or  other
acquisition  or  retirement  for value,  of  Indebtedness  of the Company or any
Subsidiary  of the  Company  that is  subordinated  in right of  payment  to the
Securities  other than  pursuant  to clause  (viii) of the second  paragraph  of
Section 1008 or clause  (ii)(h) of Section 1011, or (iv) make any  Investment in
any  Affiliate of the Company or any  Subsidiary  of the Company,  except to the
extent that the consideration  used to make such Investment  consists of Capital
Stock (other than  Redeemable  Stock) of the Company (such payments or any other
actions  described  in clauses (i) through (iv) being  collectively  "Restricted
Payments"),  if, at the time of,  and  after  giving  effect  to,  the  proposed
Restricted  Payment:  (1) an Event of Default  or event  that,  after  notice or
passage of time or both would become an Event of Default, will have occurred and
be  continuing,  (2) the Company could not Incur at least $1.00 of  Indebtedness
under the first  paragraph of Section 1008 or (3) the aggregate  amount expended
for all Restricted  Payments (the amount so expended,  if other than in cash, to
be determined in good faith by the Board of Directors,  whose determination will
be conclusive  and evidenced by a Board  Resolution)  after the date hereof will
exceed the sum of (X) 50% of the aggregate  amount of the Adjusted  Consolidated
Net Income (or, if the Adjusted Consolidated Net Income is a loss, minus 100% of
such  amount) of the Company  accrued on a  cumulative  basis  during the period
(taken as one  accounting  period)  beginning  on July 1, 1996 and ending on the
last day of the last fiscal quarter  preceding the Transaction Date plus (Y) the
aggregate net proceeds  (including the fair market value of non-cash proceeds as
determined in good faith by the Board of Directors,  whose determination will be
conclusive and evidenced by a Board Resolution) received by the Company from the
issuance and sale of its Capital  Stock (not  including  Redeemable  Stock) to a
Person who is not a  Subsidiary  of the  Company,  including an issuance or sale
permitted by this  Indenture for cash or other  property upon the  conversion of
any  Indebtedness  of the  Company  subsequent  to the Issue  Date,  or from the
issuance of any options,  warrants or other rights to acquire  Capital  Stock of
the Company (in each case,  exclusive  of any  Redeemable  Stock or any options,
warrants or other rights that are redeemable at the option of the holder, or are
required to be  redeemed,  prior to the Stated  Maturity of the  Securities  and
exclusive of any issuance of Capital  Stock to an Affiliate as  contemplated  by
(iv)  above if such  Person is an  Affiliate  by  virtue  of  clause  (i) of the
definition of "Affiliate"), plus (Z) $10 million.

                  The foregoing  provision will not take into account,  and will
not  be  violated  by  reason  of,  (i)  an  Investment  by  the  Company  in  a
Substantially-Owned Subsidiary of the Company

                                      -56-
<PAGE>

or by any  Subsidiary  of the  Company  in the  Company or a  Subsidiary  of the
Company or an Investment by the Company or any  Subsidiary of the Company in any
Affiliate that becomes a Subsidiary of the Company or any of its Subsidiaries as
a result of such Investment  (other than a Person that is an Affiliate by virtue
of clause (i) of the  definition  of  "Affiliate");  (ii) the  purchase of up to
20,000 Series A Shares of the Company in any consecutive  12-month period by the
Company,  provided  such Series A Shares of the Company are  contributed  to the
Company's  Employee  Stock Option Trust;  (iii)  payments to purchase  shares of
Capital Stock of Grupo Industrial  Atenquique,  S.A. de C.V.  outstanding on the
Issue Date and not owned  directly or indirectly  by the Company;  (iv) payments
pursuant  to the  purchase,  redemption  or other  acquisition  for value of any
shares  of  Capital  Stock of the  Company  solely  out of the  proceeds  of the
concurrent sale (other than to a Subsidiary of the Company) of shares of Capital
Stock of the Company  (other than  Redeemable  Stock);  (v) payments of pro rata
dividends to holders of minority interests in Subsidiaries of the Company;  (vi)
Permitted  Business  Investments  not  otherwise  permitted by clause (i) above,
provided that the aggregate  amount of such Permitted  Business  Investment does
not  exceed $5  million  in any  12-month  period;  or (vii) the  payment of any
dividend  within  60 days  after  the  date of  declaration  thereof,  provided,
however,  that any amounts  paid  pursuant to clause  (vii) will  thereafter  be
considered as  Restricted  Payments paid pursuant to clause (3) of the preceding
paragraph.

                  SECTION  1010.   Limitation  on  Dividend  and  Other  Payment
Restrictions Affecting  Subsidiaries.  The Company will not, and will not permit
any  Subsidiary of the Company to, create or otherwise  cause or suffer to exist
or become effective any consensual encumbrance or restriction of any kind on the
ability of any  Subsidiary of the Company to (i) pay dividends or make any other
distributions  permitted  by  applicable  law  on  any  Capital  Stock  of  such
Subsidiary owned by the Company or any other Subsidiary of the Company, (ii) pay
any  Indebtedness  owed to the Company or any other  Subsidiary  of the Company,
(iii) make loans or  advances  to the  Company  or any other  Subsidiary  of the
Company or (iv)  transfer  any of its  property  or assets to the Company or any
other Subsidiary of the Company.

                  The  foregoing  provision  will not  restrict or prohibit  any
encumbrances or restrictions  existing:  (i) pursuant to any agreement in effect
on the date hereof;  (ii)  pursuant to an agreement  which has been entered into
for the sale or disposition of all or substantially  all of the Capital Stock or
assets of such Subsidiary,  provided that consummation of such transaction would
not result in an Event of Default or an event or condition that with the passage
of time or the  giving of notice or both would  become an Event of  Default  and
that such encumbrance or restriction  terminates if such agreement is terminated
or such  transaction  is  abandoned;  (iii)  with  respect  to any Person or the
property and assets of such Person  acquired by the Company or by any Subsidiary
of the  Company,  existing  at the time of such  acquisition  and  permitted  by
Section 1013; or (iv) pursuant to an agreement  effecting a renewal,  extension,
refinancing  or  refunding  of  Indebtedness  Incurred  pursuant to an agreement
referred to in clause (i) or (iii) above; provided, however, that the provisions
contained  in  such  renewal,  extension,  refinancing  or  refunding  agreement
relating to such  encumbrance  or  restriction  are no more  restrictive  in any
material  respect than the  provisions  contained in the  agreement  the subject
thereof,  as  determined  in good faith by the Board of Directors of the Company
and evidenced by a Board Resolution.

                                      -57-
<PAGE>

                  SECTION 1011.  Limitation on the Issuance of Capital Stock and
Indebtedness of Subsidiaries.  The Company will not permit any Subsidiary of the
Company,  directly  or  indirectly,  to (i)  issue  or sell any  shares  of such
Subsidiary's  Capital  Stock  (including  options,  warrants or other  rights to
purchase  shares  of  such  Capital  Stock)  except  (a)  to  the  Company  or a
Substantially-Owned  Subsidiary  of the Company or (b) for fair  value,  or (ii)
Incur any Indebtedness except (a) Indebtedness to the Company or to a Subsidiary
of  the  Company;  (b)  Non-Recourse   Indebtedness  if  such  Subsidiary  is  a
Non-Recourse  Subsidiary;  (c)  Indebtedness  Incurred in respect of performance
bonds,  bankers'  acceptances  and letters of credit  provided  in the  ordinary
course  of  business,  provided  that  the  aggregate  principal  amount  of all
Indebtedness Incurred pursuant to this clause (c) and clause (iii) of the second
paragraph  of Section 1008 and  outstanding  at any one time does not exceed $10
million;  (d) Acquired  Indebtedness,  provided  that at the time of  Incurrence
thereof the Company could Incur at least $1.00 of  Indebtedness  under the first
paragraph of Section 1008; (e)  Indebtedness  Incurred (A) under Working Capital
Facilities,  (B) as Acquired  Indebtedness  and (C) in respect of purchase money
obligations;  provided that (i) the aggregate amount of Indebtedness outstanding
under this clause (e) shall not exceed $80 million and under  clause (B) and (C)
of this clause (e) shall not exceed $40 million,  and (ii) the aggregate  amount
outstanding under this clause (e) and under clause (i) of Section 1008 shall not
exceed $200 million;  (f)  Indebtedness  Incurred under Currency  Agreements and
Interest Rate Agreements, provided that, in the case of Currency Agreements that
relate to other  Indebtedness,  such  Currency  Agreements  do not  increase the
Indebtedness  of the Company  outstanding  at any time other than as a result of
fluctuations in foreign currency  exchange rates; (g) Indebtedness  described in
clause (vi) of the definition of the term "Indebtedness" resulting solely from a
Lien  described  in Section  1013(x);  or (h)  Indebtedness  Incurred  to renew,
extend,  refinance  or refund  Indebtedness  outstanding  on the  Issue  Date or
Indebtedness  Incurred  pursuant to clause (c), (d) or (e)(B)  above,  provided,
however,  that such  Indebtedness  does not exceed the principal  amount of, and
premium,  if any, on the  Indebtedness  being renewed,  extended,  refinanced or
refunded,  plus costs and expenses ordinarily and customarily incurred upon such
renewal,  extension,  refinancing or refunding, and provided further that if the
Indebtedness being renewed,  extended,  refinanced or refunded is subordinate in
right of payment to the Securities,  such  Indebtedness  must be subordinated in
right of payment to the Securities to the same extent.

                  SECTION 1012. Limitation on Transactions with Affiliates.  The
Company will not, and will not permit any Subsidiary of the Company to, directly
or indirectly,  enter into, renew or extend any transaction (including,  without
limitation,  the purchase, sale, lease or exchange of property or assets, or the
rendering of any service) with any Affiliate of the Company or any Subsidiary of
the Company,  except (i) upon fair and reasonable terms no less favorable to the
Company or such Subsidiary  than could be obtained in a comparable  arm's-length
transaction  with a  Person  that is not  such  an  Affiliate  and  (ii) if such
transaction is in the best interests of the Company or such Subsidiary, provided
that with respect to a transaction or series of related  transactions  involving
aggregate  payments by the Company or such Subsidiary having a fair market value
equal to or in excess of (a) $1 million but less than $5  million,  the Board of
Directors of the Company  approves such  transaction  or series of  transactions
and, in its good faith  judgment,  believes that such  transaction  or series of
transactions  complies with clauses (i) and (ii) of this  paragraph as evidenced
by a Board  Resolution and (b) $5 million,  (A) the Company receives the written
opinion of a firm of investment bankers nationally recognized in the United

                                      -58-
<PAGE>

States  that such  transaction  (or  series  of  transactions)  is fair,  from a
financial  point of view, to the Company or such Subsidiary and (B) the Board of
Directors of the Company  approves such  transaction  or series of  transactions
and, in its good faith  judgment,  believes that such  transaction  or series of
transactions complies with clauses (i) and (ii) of this paragraph,  as evidenced
by a Board Resolution.

                  The foregoing limitation does not limit, and will not apply to
(i) any transaction between the Company and any  Substantially-Owned  Subsidiary
of the Company or between Substantially-Owned  Subsidiaries of the Company; (ii)
any  transaction  between the Company or any  Subsidiary  of the Company and any
Person that is an Affiliate of the Company or of any  Subsidiary of the Company,
if (u) such  Person is engaged in a similar  business to that of the Company and
its Subsidiaries,  (v) such transaction is in the ordinary course of business of
the Company or its  Subsidiary,  as the case may be, and such  Person,  (w) such
transaction is on fair and reasonable  terms no less favorable to the Company or
such Subsidiary than could be obtained in a comparable arm's-length  transaction
with a Person  that is not an  Affiliate,  (x) such  transaction  is in the best
interest of the Company or such Subsidiary,  and (y) such Person is an Affiliate
solely by virtue of being directly or indirectly  controlled by the Company or a
Subsidiary of the Company;  (iii) payments not prohibited by Section 1009 solely
by virtue of clause (iv) of the first  paragraph  thereof or  payments  that are
"Restricted   Payments"  not  prohibited  by  Section  1009;  (iv)  payments  of
reasonable  and  customary  fees and salaries of  directors  and officers of the
Company;  (v) so long  as the  1994  Yankee  Bonds  are  outstanding,  loans  or
advances,  or  transfers  of  any  property  or  assets  to the  Company  or any
Subsidiary of the Company;  and (vi) the contribution by the Company of Series A
Shares of the Company to the Company's Employee Stock Option Trust.

                  SECTION 1013.  Limitation on Liens.  The Company will not, and
will not permit any  Subsidiary  of the Company to, Incur any Lien upon property
or assets of the Company or any Subsidiary of the Company to secure Indebtedness
without  making,  or causing such  Subsidiary to make,  effective  provision for
securing the Securities equally and ratably with (or prior to) such Indebtedness
as to such property for as long as such  Indebtedness  will be so secured unless
such Indebtedness is subordinate in right of payment to the Securities, in which
case  the  Securities  will be  secured  prior to such  Indebtedness  as to such
property for as long as such Indebtedness will be so secured.

                  The  foregoing  restrictions  will  not  apply  to  (i)  Liens
existing on the Issue Date; (ii) Liens securing only the Securities; (iii) Liens
upon  property or assets of any  Subsidiary  of the Company in favor of only the
Company or any Subsidiary of the Company,  and Liens upon the property or assets
of the  Company  in  favor  of only any  Substantially-Owned  Subsidiary  of the
Company;  (iv) Liens for taxes or assessments or other  governmental  charges or
levies not yet delinquent  or, if due,  which are being  contested in good faith
and for  which a  reserve  or  other  appropriate  provision,  if any,  is being
maintained in accordance  with Mexican GAAP; (v) Liens Incurred or deposits made
in the  ordinary  course  of  business  to  secure  obligations  under  workers'
compensation,  unemployment  insurance and other types of social  security laws;
(vi) any judgment Lien,  unless the judgment it secures will not, within 60 days
after the entry  thereof,  have been  discharged  or  execution  thereof  stayed
pending  appeal,  or will not have  been  discharged  within  60 days  after the
expiration of any such stay; (vii) Liens Incurred to secure the performance of

                                      -59-
<PAGE>

statutory  obligations,  surety or appeal bonds,  performance or return-of-money
bonds or other  obligations of a like nature  incurred in the ordinary course of
business;   (viii)   statutory   Liens  of  landlords  and  Liens  of  carriers,
warehousemen,  mechanics, materialmen,  repairmen or other similar Liens arising
in the  ordinary  course  of  business  and  with  respect  to  amounts  not yet
delinquent or being  contested in good faith by  appropriate  legal  proceedings
promptly  instituted and  diligently  conducted and for which a reserve or other
appropriate  provision,  if any, as shall be required in conformity with Mexican
GAAP shall have been made;  (ix) Liens with  respect to  Acquired  Indebtedness,
provided that such Liens do not extend to or cover any property or assets of the
Company or any  Subsidiary  of the  Company  other than the  property  or assets
acquired and such Acquired Indebtedness is otherwise permitted by this Indenture
and such Lien is not incurred in connection  with, or in  contemplation  of, the
transaction  involving the incurrence of such Acquired  Indebtedness;  (x) Liens
upon  property  acquired  after the Issue Date,  provided  that (A) such Lien is
created solely for the purpose of securing  Indebtedness Incurred (1) to finance
the cost  (including the cost of improvement  or  construction)  of the property
subject  thereto and such Lien is created prior to, at the time of or within six
months after the later of the  acquisition,  completion of  construction  or the
commencement  of  full  operation  of  such  property  or (2) to  refinance  any
Indebtedness previously so secured, (B) the principal amount of the Indebtedness
secured by such Lien does not exceed 100% of such cost,  (C) any such Lien shall
not extend to or cover any  property  other  than such  property,  the  proceeds
thereof and any improvements  thereon and (D) the Incurrence of the Indebtedness
secured  by such  Lien is  otherwise  permitted  by the  Indenture;  (xi)  Liens
securing  Indebtedness  Incurred under Section  1011(ii)(e)(A);  and (xii) Liens
securing Indebtedness  Incurred to renew, extend,  refinance or refund, in whole
or in part,  Indebtedness secured by any Lien incurred under clause (i), (ix) or
(x) hereof,  provided,  that such Lien does not extend to any other  property or
assets and the principal amount of Indebtedness so secured is not increased.

                  In addition to the foregoing, the Company and its Subsidiaries
may  Incur a Lien to  secure  any  Indebtedness,  without  equally  and  ratably
securing the Securities, if the sum of (i) the amount of Indebtedness secured by
a Lien entered into after the date of this Indenture and otherwise prohibited by
this Indenture and (ii) the aggregate  amount of all  Attributable  Indebtedness
with respect to all Sale and Leaseback  Transactions entered into after the date
of  the  Indenture  pursuant  to  Section  1014  does  not  exceed  15%  of  the
Consolidated Tangible Net Worth of the Company.

                  SECTION 1014.  Limitation on Sale and Leaseback  Transactions.
The  Company  will not,  and will not permit any  Subsidiary  of the Company to,
enter into any Sale and Leaseback Transaction unless the aggregate amount of all
Attributable  Indebtedness  with  respect  to all  such  transactions,  plus all
Indebtedness  secured by Liens (excluding secured  Indebtedness that is excluded
as described in the second  paragraph of Section  1013),  does not exceed 15% of
the Consolidated Tangible Net Worth of the Company.

                  SECTION 1015.  Limitation on Asset Sales.  In the event and to
the extent  that the Net Cash  Proceeds  received  by the  Company or any of its
Subsidiaries  from one or more Asset Sales  occurring on or after the Issue Date
in any  period of 12  consecutive  months  exceed 10% of  Adjusted  Consolidated
Assets  in any  one  fiscal  year  (determined  as of the  date  closest  to the
commencement  of such  12-month  period for which a balance sheet of the Company
and its

                                      -60-
<PAGE>

Subsidiaries has been prepared),  then the Company will,  within 12 months after
the date such Net Cash Proceeds are  received,  apply an amount equal to the Net
Cash  Proceeds  from such  Asset  Sale (or  enter  into a  definitive  agreement
committing  to so apply  such  amount  within 12  months  after the date of such
agreement),  either (i) to an  investment or  investments  in property or assets
that are of a nature or type or are used in a business  (or in a company  having
property  and assets of a nature or type,  or engaged in a business)  similar or
related to the nature or type of the property and assets of, or the business of,
the Company and its Subsidiaries  existing on the date thereof (as determined in
good faith by the Board of Directors, whose determination will be conclusive and
evidenced by a Board  Resolution),  or (b) to permanently repay all or a portion
of the 1994 Yankee Bonds.  The amount of such excess Net Cash Proceeds  required
to be applied (or to be committed to be applied) during such 12-month period and
not applied as so required  by the end of such  period will  constitute  "Excess
Proceeds."

                  If, as of the first day of any calendar  month,  the aggregate
amount of Excess Proceeds not theretofore subject to an Offer to Purchase totals
at least $5 million, the Company must, not later than the fifteenth Business Day
of such month, make an Offer to Purchase from the Holders on a pro rata basis an
aggregate  principal  amount of Securities  equal to the Excess Proceeds on such
date,  at a  purchase  price  equal  to 100%  of the  principal  amount  of such
Securities,  plus, in each case,  accrued interest (if any) to the Purchase Date
(subject  to the  right of  Holders  of record on the  relevant  Record  Date to
receive  interest  due on an  Interest  Payment  Date that is on or prior to the
Purchase Date) (the "Excess Proceeds Payment").

                  Notwithstanding  the foregoing,  (i) to the extent that any or
all of the Net Cash  Proceeds  of any Asset  Sale are  prohibited  or delayed by
applicable local law from being  repatriated to Mexico,  the portion of such Net
Cash  Proceeds so affected  will not be required to be applied  pursuant to this
Section  1015  but may be  retained  for so long,  but only for so long,  as the
applicable local law will not permit  repatriation to Mexico (the Company hereby
agrees to promptly take all reasonable  actions required by applicable local law
to permit such repatriation) and once such repatriation of any such affected Net
Cash Proceeds is permitted  under the  applicable  local law, such  repatriation
will be  immediately  effected and such  repatriated  Net Cash  Proceeds will be
applied in the manner set forth in this  Section  1015 as if such Asset Sale had
occurred on the date of  repatriation;  and (ii) to the extent that the Board of
Directors has  determined in good faith that  repatriation  of any or all of the
Net Cash Proceeds would have an adverse tax consequence to the Company,  the Net
Cash  Proceeds so affected  may be retained  outside  Mexico for so long as such
adverse tax consequence would continue.

                  On the  Purchase  Date the Company will (i) accept for payment
on a pro rata basis  Securities  or portions  thereof  tendered  pursuant to the
Offer to Purchase;  (ii) deposit with the Paying Agent money  sufficient  to pay
the Purchase Price of all Securities or portions thereof so accepted;  and (iii)
deliver, or cause to be delivered, to the Trustee Securities or portions thereof
so accepted together with an Officers' Certificate  specifying the Securities or
portions  thereof  accepted for payment by the  Company.  The Paying Agent shall
promptly mail or deliver to the Holders of Securities so accepted  payment in an
amount equal to the Purchase Price, and the Trustee shall promptly  authenticate
and mail or  deliver  to such  Holders a new  Security  or  Securities  equal in
principal  amount to any  unpurchased  portion of the  Security  surrendered  as
requested by the Holder.  The Company will publicly  announce the results of the
Offer to

                                      -61-
<PAGE>

Purchase as soon as  practicable  after the Purchase  Date. For purposes of this
Section 1015, the Trustee will act as the Paying Agent.

                  SECTION 1016. Change of Control.  (a) Upon the occurrence of a
Change of Control,  each Holder of a Security  shall have the right to have such
Security  repurchased  by the Company on the terms and  conditions  set forth in
this  Section  1016  and this  Indenture.  The  Company  shall,  within  30 days
following the date of the consummation of a transaction resulting in a Change of
Control (as defined below), make an Offer to Purchase all Outstanding Securities
at a Purchase  Price  equal to 101% of their  aggregate  principal  amount  plus
accrued interest,  if any, to the Purchase Date (subject to the right of Holders
of record on the  relevant  Record Date to receive  interest  due on an Interest
Payment Date that is on or prior to the Purchase Date).

                  (b) One Business Day prior to the Purchase  Date,  the Company
shall  deposit  with the Paying  Agent (or,  if the Company is acting as its own
Paying  Agent,  segregate  and hold in trust as provided in Section  1003) money
sufficient to pay the Purchase  Price of all  Securities or portions  thereof so
accepted.  On the  Purchase  Date,  the  Company  shall (i) accept  for  payment
Securities or portions thereof tendered  pursuant to the Offer to Purchase,  and
(ii)  deliver,  or cause to be  delivered,  to the  Trustee all  Securities,  or
portions thereof so accepted together with an Officers'  Certificate  specifying
the  Securities  or portions  thereof  accepted for payment by the Company.  The
Paying  Agent shall  promptly  mail or deliver to the Holders of  Securities  so
accepted payment in an amount equal to the Purchase Price, and the Trustee shall
promptly  authenticate  and mail or deliver to such  Holders a new  Security  or
Securities equal in principal amount to any unpurchased  portion of the Security
surrendered as requested by the Holder.  The Company shall publicly announce the
results of the Offer to Purchase on or as soon as practicable after the Purchase
Date.

                  (c) A "Change of Control"  will be deemed to have  occurred in
the event that, after the date of this Indenture,  either (i)(a) a Person or any
Persons  acting  together  which  would  constitute  a "group" (a  "Group")  for
purposes  of Section  13(d) of the  Exchange  Act,  or any  successor  provision
thereto, together with any Affiliates or Related Persons thereof (other than any
person or Group  controlled  by the  Management  Stockholders  together with any
Affiliates or Related Persons  thereof),  has become the beneficial owner (other
than  through the CPO  Trust),  by way of  purchase,  merger,  consolidation  or
otherwise, of 35% or more of the Voting Stock of the Company and (b) such Person
or Group  (together with any Affiliates or Related  Persons  thereof) has become
the  beneficial  owner (other than  through the CPO Trust),  by way of purchase,
merger,  consolidation  or otherwise of a greater  percentage of Voting Stock of
the Company than that held by the  Management  Stockholders  (together  with any
Affiliates  or  Related  Persons  thereof);  or  (ii)  at any  time  during  any
consecutive two-year period individuals who at the beginning of such period were
members  of the  Board  of  Directors  of the  Company  (together  with  any new
directors  whose  election by such Board of  Directors or whose  nomination  for
election by the shareholders of the Company was approved by a vote of a majority
of directors  then still in office who either were directors at the beginning of
such period or whose  election or  nomination  for  election was  previously  so
approved)  cease  for any  reason  to  constitute  a  majority  of the  Board of
Directors of the Company then in office.

                                      -62-
<PAGE>

                  SECTION  1017.   Indemnification  of  Judgment  Currency.  The
Company  shall  indemnify  the Trustee and any Holder of a Security  against any
loss incurred by the Trustee or such Holder,  as the case may be, as a result of
any  judgment  or order  being  given  or made for any  amount  due  under  this
Indenture  or such  Security  and being  expressed  and paid in a currency  (the
"Judgment  Currency")  other than United States dollars,  and as a result of any
variation  between (i) the rate of exchange  at which the United  States  dollar
amount is converted into the Judgment  Currency for the purpose of such judgment
or order and (ii) the spot rate of exchange in The City of New York at which the
Trustee  or such  Holder,  as the case may be,  on the date of  payment  of such
judgment or order is able to purchase  United States  dollars with the amount of
the  Judgment  Currency  actually  received by the Trustee or such  Holder.  The
foregoing  indemnity shall  constitute a separate and independent  obligation of
the Company and shall continue in full force and effect notwithstanding any such
judgment or order as aforesaid.  The term "spot rate of exchange"  shall include
any premiums and costs of exchange  payable in connection  with the purchase of,
or conversion into, United States dollars.

                  SECTION 1018. Payment of Additional Amounts.  (a) All payments
of  principal  and  interest  in respect of the  Securities  shall be made after
withholding  or deduction for any taxes,  duties,  assessments  or  governmental
charges of whatever nature imposed, levied,  collected,  withheld or assessed by
or within  Mexico or any authority  therein or thereof  having power to tax. The
Company shall pay such additional amounts ("Additional  Amounts") as will result
in receipt by the  Holders of such  amounts as would have been  received by them
had no  such  withholding  or  deduction  been  required,  except  that  no such
Additional  Amounts shall be payable with respect to any payment on any Security
to the extent:

                  (i)  that  any  such  taxes,  duties,   assessments  or  other
         governmental  charges  would not have been imposed but for a connection
         between the Holder or beneficial  owner of such Security and Mexico (or
         any  authority  therein or thereof  having power to tax) other than the
         holding of such  Security  and the receipt of payments  with respect to
         such Security;

                  (ii)  of  any  such  taxes,   duties,   assessments  or  other
         governmental  charges with respect to a Security  presented for payment
         more than 30 days after the date on which such  payment  became due and
         payable or the date on which  payment  thereof is duly provided for and
         notice thereof given to Holders,  whichever occurs later, except to the
         extent  that the Holder of such  Security  would have been  entitled to
         such Additional  Amounts on presenting such Security for payment on any
         date during such 30-day period;

                  (iii) of any  Mexican  taxes to the extent  that such  Mexican
         taxes would not have been  imposed but for the failure of the Holder or
         beneficial  owner of such  Security to comply  with any  certification,
         identification,   information,   documentation   or   other   reporting
         requirement  if (a) such  compliance  is  required  by law  (including,
         without  limitation,  Article  154  of the  Mexican  Income  Tax  Law),
         regulation or  administrative  practice as a precondition  to exemption
         from, or reduction in the rate of withholding  of, Mexican taxes (other
         than a  reduction  or  exemption  pursuant  to any income tax treaty to
         which  Mexico is a party)  and (b) at least 30 days  prior to the first
         interest  payment  date with  respect to which the Company  shall apply
         this clause (iii), the Company shall have

                                      -63-
<PAGE>

         notified the Trustee in writing  that  the Holders or beneficial owners
         of  the  Securities  will  be required to provide such  information or
         documentation;

                  (iv) of any Mexican  taxes  imposed at a rate in excess of 15%
         if (a) such  Holder or  beneficial  owner has  failed to  provide  on a
         timely basis, at the reasonable  request of the Company (subject to the
         conditions set forth below),  information or  documentation  concerning
         such Holder's or beneficial  owner's  eligibility for benefits under an
         income  tax  treaty to which  Mexico is a party  that is  necessary  to
         determine the  appropriate  rate of deduction or withholding of Mexican
         taxes under any such treaty and (b) at least 30 days prior to the first
         Interest Payment Date with respect to which the Company shall make such
         request,  the Company  shall have  notified the Trustee in writing that
         the Holders or beneficial  owners of the Securities will be required to
         provide such information or documentation; or

                  (v) of  estate, inheritance,  gift,  property or other similar
         taxes imposed with respect to such Security.

                  Notwithstanding   the  foregoing,   the   limitations  on  the
Company's obligation to pay Additional Amounts set forth in Section 1018(a)(iii)
and  1018(a)(iv)  above  shall  not  apply if a  certification,  identification,
information,  documentation or other reporting  requirement described in Section
1018(a)(iii),  or the provision of  information  or  documentation  described in
Section  1018(a)(iv),  as the case may be, would be materially more onerous,  in
form, in procedure or in the substance of information disclosed, to such Holders
or beneficial owners (taking into account any relevant  differences between U.S.
and  Mexican  law,  regulation  or  administrative   practice)  than  comparable
information  or  other  reporting  requirements  imposed  under  U.S.  tax  law,
regulation (including proposed regulations) and administrative practice or other
reporting  requirements  imposed  as of  July  22,  1996  under  U.S.  tax  law,
regulation (including proposed regulations) and administrative practice (such as
IRS Forms 1001, W-8 and W-9). Notwithstanding the preceding sentence, so long as
Rule 252 issued by the  Secretaria de Hacienda y Credito  Publico (the "Ministry
of Finance")  published in the Diario Oficial de la Federacion on March 29, 1996
or a substantially  similar successor of such rule is in effect, the limitations
on the  Company's  obligation  to pay  Additional  Amounts  set forth in Section
1018(a)(iii) above shall not apply unless (a) the certification, identification,
information,  documentation  or other  reporting  requirement  described in such
Section  1018(a)(iii) is required in order to apply Rule 252 (or a substantially
similar   successor   rule   thereto),   (b)  the  Company  cannot  obtain  such
certification,  identification,  information,  documentation  or other reporting
requirement  through  reasonable  diligence and (c) the Company  otherwise would
meet the  requirements  for application of Rule 252 (or a substantially  similar
successor rule thereto).  In addition,  Sections  1018(a)(iii)  and  1018(a)(iv)
above shall not be construed to require that a non-Mexican pension or retirement
fund or a non-Mexican  financial  institution or any other Holder  register with
the  Ministry  of Finance  for the purpose of  establishing  eligibility  for an
exemption from Mexican withholding tax or to require that a Holder or beneficial
owner  certify  or  provide  information  concerning  whether  it is or is not a
tax-exempt pension or retirement fund.

                  Upon the Trustee's receipt of timely written notification from
the Company  that the Holders or  beneficial  owners will be required to provide
information or documentation, as

                                      -64-
<PAGE>

described  in Section  1018(a)(iii)  or  1018(a)(iv)  above,  the Trustee  shall
provide such  notification to the Holders or beneficial  owners, as the case may
be. The Company shall, as soon as practicable and in no event later than 30 days
following the due date for each payment of Mexican taxes withheld by the Company
with respect to the Securities, provide the Trustee with a certified copy of the
official receipt  evidencing the payment of such taxes. The Trustee shall, for a
period of five years  following the due date for each  payment,  maintain in its
files each such certified copy received from the Company.

                  The Trustee  shall,  upon  written  request by the  beneficial
owner of a Security or any Paying Agent, provide such owner or Paying Agent with
a copy of the  certified  copy of the  receipt  provided  to the  Trustee by the
Company regarding the amount of Mexican tax withheld by the Company with respect
to the  Securities  within 30 Business Days following the receipt by the Trustee
of such request.

                  In respect of the  Securities  issued  hereunder,  at least 10
days prior to the first date of payment of  interest  on the  Securities  and at
least 10 days prior to each date,  if any, of payment of  principal  or interest
thereafter if there has been any change with respect to the matters set forth in
the below-mentioned Officers' Certificate, the Company shall furnish the Trustee
and each Paying Agent with an Officers' Certificate  instructing the Trustee and
such Paying  Agent as to whether such payment of principal of or any interest on
such Securities shall be made without deduction or withholding for or on account
of any tax, duty, assessment or other governmental charge. If any such deduction
or  withholding  shall be required  by Mexico or under the  federal  laws of the
United States, then such certificate shall specify,  by country,  the amount, if
any,  required to be  deducted  or  withheld on such  payment to Holders of such
Securities, and the Company shall pay or cause to be paid to the Trustee or such
Paying Agent  Additional  Amounts,  if any,  required by this Section 1018.  The
Company  agrees to indemnify  the Trustee and each Paying Agent for, and to hold
them  harmless  against,  any loss,  liability  or expense  reasonably  incurred
without  negligence  or bad faith on their part arising out of or in  connection
with actions taken or omitted by them in reliance on any  Officers'  Certificate
furnished pursuant to this Section 1018.

                  The Company  shall pay all stamp and similar  duties,  if any,
which may be  imposed  by  Mexico,  the  United  States of  America or any other
governmental  entity or political  subdivision therein or thereof, or any taxing
authority of or in any of the  foregoing,  with respect to this Indenture or the
initial issuance of the Securities.

                  (b) Except as  specifically  provided in the  Security or this
Indenture, the Company shall not be required to make any payment with respect to
any tax,  duty,  assessment  or other  governmental  charge of  whatever  nature
imposed  or levied by any  government  or any  political  subdivision  or taxing
authority thereof or therein.

                  (c) The  Company  shall  provide  each  Paying  Agent  and any
withholding agent under relevant tax regulations with copies of each certificate
received by the Company from a Holder of a Security pursuant to the text of such
Security.  Each such Paying Agent and  withholding  agent shall retain each such
certificate  received by it for as long as any Security is outstanding and in no
event for less than four years after its receipt, and for such additional period

                                      -65-
<PAGE>

thereafter,  as set forth in an Officers'  Certificate,  as such certificate may
become material in the administration of applicable tax laws.

                  (d) All  references in this Indenture to principal or interest
in respect of any  Security  shall be deemed to mean and include all  Additional
Amounts,  if any,  payable in respect of such principal or interest,  unless the
context  otherwise  requires,  and express  mention of the payment of Additional
Amounts in any provision hereof shall not be construed as excluding reference to
Additional  Amounts in those provisions hereof where such express mention is not
made.

                  (e) In the event that  Additional  Amounts  actually paid with
respect to the  Securities  are based on rates of  deduction or  withholding  of
Mexican  taxes in excess of the  appropriate  rate  applicable  to the Holder or
beneficial  owner of such Securities,  and, as a result thereof,  such Holder or
beneficial  owner is  entitled  to make a claim  for a refund  or credit of such
excess from Mexican tax authorities, then such Holder or beneficial owner shall,
by accepting  the  Securities,  be deemed to have assigned and  transferred  all
right,  title  and  interest  to any such  claim  for a refund or credit of such
excess  to the  Company.  However,  by making  such  assignment,  the  Holder or
beneficial  owner makes no  representation  or warranty that the Company will be
entitled  to  receive  such  claim for a refund or  credit  and  incurs no other
obligation with respect thereto.

                  SECTION 1019. Provision of Financial  Information.  Whether or
not the Company is subject to Section 13(a) or 15(d) of the Exchange Act, or any
successor  provision  thereto,  the Company  will file with the  Commission  the
annual  reports,  quarterly  reports and other documents which the Company would
have been required to file with the Commission pursuant to such Section 13(a) or
15(d) if the  Company  were so  subject,  such  documents  to be filed  with the
Commission on or prior to the respective  dates (the "Required Filing Dates") by
which the  Company  would have been  required so to file such  documents  if the
Company were so subject.  The Company shall also in any event (a) within 15 days
of each Required Filing Date (i) transmit,  or cause the Trustee to transmit, by
mail to all  Holders,  as their  names  and  addresses  appear  in the  Security
Register, without cost to such Holders, and (ii) file with the Trustee copies of
the annual  reports,  quarterly  reports and other  documents  which the Company
would have been required to file with the  Commission  pursuant to Section 13(a)
or 15(d) of the Exchange Act or any successor  provisions thereto if the Company
were subject to such  Sections,  and (b) if filing such documents by the Company
with the  Commission  is not  permitted  under the Exchange  Act,  promptly upon
written request supply copies of such documents to any prospective  Holder.  All
such documents to be so filed or transmitted must be prepared in English and all
financial  statements  included  therein  must be  prepared in  accordance  with
Mexican GAAP (with, in the case of annual financial statements, a reconciliation
to U.S. GAAP as contemplated  by the rules and  regulations of the  Commission),
and include a convenience translation to U.S. dollars.

                  SECTION  1020.  Waiver of Certain  Covenants.  The Company may
omit in any  particular  instance to comply with any covenant or  condition  set
forth  in  Sections  1008 to  1019,  inclusive,  if  before  the  time  for such
compliance  the  Holders  of at least a  majority  in  principal  amount  of the
Outstanding  Securities  shall,  by Act  of  such  Holders,  either  waive  such
compliance in such instance or generally waive  compliance with such covenant or
condition, but no such

                                      -66-
<PAGE>

waiver shall extend to or affect such covenant or condition except to the extent
so  expressly  waived,  and,  until such  waiver  shall  become  effective,  the
obligations  of the Company and the duties of the Trustee in respect of any such
covenant or condition shall remain in full force and effect; provided,  however,
with  respect to an Offer to Purchase as to which an Offer has been  mailed,  no
such  waiver may be made or shall be  effective  against  any  Holder  tendering
Securities  pursuant to such Offer,  and the Company may not omit to comply with
the terms of such Offer as to such Holder.


                                 ARTICLE ELEVEN

                            REDEMPTION OF SECURITIES
                            ------------------------

                  SECTION  1101.  Right of  Redemption.  The  Securities  may be
redeemed,  at the option of the  Company,  as a whole but not in part,  if, as a
result of any amendment to, or change in, the laws (or any regulation or rulings
thereunder) of Mexico or any political  subdivision or taxing authority  thereof
or  therein,  or any  amendment  to or change in an official  interpretation  or
application  regarding  such laws,  regulations  or  rulings,  which  amendment,
change,  application or  interpretation  becomes  effective on or after July 22,
1996,  the Company pays or would be obligated  for reasons  outside its control,
and after taking reasonable  measures  available to it to avoid such obligation,
to pay Additional  Amounts in respect of any Security  pursuant to the terms and
conditions  thereof in excess of those  attributable to the Mexican  withholding
tax of 15% imposed on interest  payments to Holders,  then, at the option of the
Company,  the  Securities  may be redeemed,  as a whole but not in part,  at any
time,  upon giving not less than 30 nor more than 60 days' notice by mail to the
Holders (which notice shall be irrevocable),  at a Redemption Price equal to the
principal amount thereof,  together with accrued interest to the Redemption Date
(subject  to the  right of  Holders  of record on the  relevant  Record  Date to
receive  interest  due on the  Interest  Payment Date that is on or prior to the
Redemption  Date) and  Additional  Amounts,  if any,  which would  otherwise  be
payable;  provided  that (1) no such notice of  redemption  may be given earlier
than 90 days prior to the earliest  date on which the Company would but for such
redemption be obligated to pay such Additional  Amounts and (2) at the time such
notice is given,  such  obligation  to pay such  Additional  Amounts  remains in
effect.

                  Prior to the publication of any notice of redemption  pursuant
to this Section 1101,  the Company shall deliver to the Trustee (i) an Officers'
Certificate  stating that the Company is entitled to effect such  redemption and
setting  forth a statement  of facts  showing that the  condition or  conditions
precedent  to the right of the  Company so to redeem have  occurred  and (ii) an
Opinion of Mexican  Counsel to the effect that the  Company has or shall  become
obligated  to pay such  Additional  Amounts  as a result  of such  amendment  or
change.  Such notice,  once  delivered  by the Company to the Trustee,  shall be
irrevocable.

                  SECTION  1102.  Election  to Redeem;  Notice to  Trustee.  The
election of the Company to redeem any Securities  pursuant to Section 1101 shall
be evidenced by a Board Resolution. In case of any redemption at the election of
the Company,  the Company shall,  at least 60 days prior to the Redemption  Date
fixed by the Company (unless a shorter notice shall be

                                      -67-
<PAGE>

satisfactory to the Trustee),  notify the Trustee of such Redemption Date and of
the principal amount of Securities to be redeemed.

                  SECTION  1103.   Notice  of  Redemption.   Notices  to  redeem
Securities shall be given to each Holder in the manner set forth in Section 106.
Such notice will be given once not more than 60 days nor less than 30 days prior
to the date fixed for redemption. Such notices will be deemed to have been given
on the  date of  mailing.  Notices  to  redeem  Securities  shall  identify  the
Securities to be redeemed  (including  CUSIP  numbers),  specify the  Redemption
Date,  the places of payment,  that payment will be made upon  presentation  and
surrender of the Securities to be redeemed,  that interest  accrued to the date,
fixed for redemption  (subject to the right of Holders of record on the relevant
Record Date to receive  interest on an Interest Payment Date that is on or prior
to the  Redemption  Date) will be paid as specified in said notice,  and that on
and after said date  interest  thereon  will cease to accrue.  Such notice shall
also state that the conditions  precedent to such  redemption  have occurred and
the Redemption Price.

                  Notice of  redemption  of  Securities  to be  redeemed  at the
election  of the  Company  shall be given by the  Company  or, at the  Company's
request, by the Trustee in the name and at the expense of the Company.

                  SECTION  1104.  Deposit  of  Redemption  Price.  Prior  to any
Redemption  Date,  the Company  shall  deposit with the Trustee or with a Paying
Agent (or, if the Company is acting as its own Paying Agent,  segregate and hold
in trust as provided in Section  1003) an amount of money  sufficient to pay the
Redemption  Price of, and  (except if the  Redemption  Date shall be an Interest
Payment Date) accrued  interest on, all the Securities  which are to be redeemed
on that date.

                  SECTION 1105. Securities Payable on Redemption Date. If notice
of  redemption  has been  given in the manner  set forth in  Section  1103,  the
Securities shall become due and payable on the Redemption Date specified in such
notice and upon  presentation  and  surrender of the  Securities at the place or
places  specified in such notice,  the Securities  shall be paid and redeemed by
the  Company  at the  places  and  in the  manner  herein  specified  and at the
Redemption Price herein specified together with accrued interest (subject to the
right of Holders of record on the relevant Record Date to receive interest on an
Interest  Payment  Date  that is on or  prior  to the  Redemption  Date)  to the
Redemption  Date.  From  and  after  the  Redemption  Date,  if  monies  for the
redemption of Securities called for redemption shall have been made available at
the office of the Paying  Agent (or,  if the Company is acting as its own Paying
Agent, segregated and held in trust as provided in Section 1003), for redemption
on the Redemption Date, the Securities called for redemption shall cease to bear
interest,  and the only  right of the  Holders  of such  Securities  shall be to
receive payment of the Redemption Price together with accrued interest  (subject
to the right of  Holders  of  record  on the  relevant  Record  Date to  receive
interest on an Interest Payment Date that is on or prior to the Redemption Date)
to the  Redemption  Date as  aforesaid.  If  monies  for the  redemption  of the
Securities are not made  available for payment until after the Redemption  Date,
the Securities called for redemption shall not cease to bear interest until such
monies have been so made available.

                                      -68-
<PAGE>

                  If any  Security  called for  redemption  shall not be so paid
upon surrender  thereof for redemption,  the principal  shall,  until paid, bear
interest from the Redemption Date at the rate borne by the Security.


                                 ARTICLE TWELVE

                       DEFEASANCE AND COVENANT DEFEASANCE
                       ----------------------------------

                  SECTION  1201.   Company's  Option  to  Effect  Defeasance  or
Covenant Defeasance.  The Company may at its option by Board Resolution,  at any
time,  elect  to  have  either  Section  1202 or  Section  1203  applied  to the
Outstanding  Securities  upon  compliance with the conditions set forth below in
this Article Twelve.

                  SECTION 1202.  Defeasance  and  Discharge.  Upon the Company's
exercise of the option provided in Section 1201 applicable to this Section,  the
Company  shall be deemed  to have  been  discharged  from its  obligations  with
respect to the Outstanding Securities on the date the conditions set forth below
are satisfied  (hereinafter,  "Defeasance").  For this purpose,  such Defeasance
means that the Company  shall be deemed to have paid and  discharged  the entire
indebtedness represented by the Outstanding Securities and this Indenture and to
have  satisfied  all its  other  obligations  under  such  Securities  and  this
Indenture  insofar as such  Securities  are concerned  (and the Trustee,  at the
expense of the Company,  shall  execute  proper  instruments  acknowledging  the
same),  except for the following which shall survive until otherwise  terminated
or  discharged  hereunder:  (A) the  rights of  Holders  of such  Securities  to
receive,  solely from the trust fund described in Section 1204 and as more fully
set forth in such Section,  payments in respect of the principal of and interest
on such  Securities  when such payments are due, (B) the  Company's  obligations
with respect to such Securities under Sections 304, 305, 306, 1002 and 1003, (C)
the rights,  powers,  trusts,  duties and  immunities of the Trustee  hereunder,
including,  without  limitation,  the rights of the  Trustee  under  Section 607
hereunder,  and (D) this Article Twelve. Subject to compliance with this Article
Twelve,   the  Company  may   exercise   its  option  under  this  Section  1202
notwithstanding the prior exercise of its option under Section 1203.

                  SECTION 1203. Covenant Defeasance. Upon the Company's exercise
of the option  provided in Section  1201  applicable  to this  Section,  (i) the
Company shall be released from its obligations  under Sections 1008 through 1016
and Section 1019,  inclusive,  any covenants provided pursuant to Section 901(2)
for the  benefit of the Holders of  Securities  and Clause (3) and Clause (4) of
Section 801, and (ii) the occurrence of an event  specified in Section 501(3) or
501(4) (but only with  respect to Clauses (3) and (4) of Section  801) or 501(5)
shall  not be  deemed  to be an  Event  of  Default  on and  after  the date the
conditions set forth below are satisfied  (hereinafter,  "Covenant Defeasance").
For this purpose,  such Covenant  Defeasance  means that the Company may omit to
comply with and shall have no  liability  in respect of any term,  condition  or
limitation  set  forth  in any  such  section  or  clause  whether  directly  or
indirectly  by reason of any reference  elsewhere  herein to any such section or
clause or by reason of any reference in any such section; to any other provision
herein or in any other  document,  but the remainder of this  Indenture and such
Securities shall be unaffected thereby.

                                      -69-
<PAGE>

                  SECTION 1204. Conditions to Defeasance or Covenant Defeasance.
The following  shall be the  conditions to application of either Section 1202 or
Section 1203 to the then Outstanding Securities:

                  (1) The Company shall  irrevocably have deposited or caused to
         be  deposited  with the  Trustee  (or another  trustee  satisfying  the
         requirements  of  Section  609 who  shall  agree  to  comply  with  the
         provisions of this Article  Twelve  applicable to it) as trust funds in
         trust for the purpose of making the  following  payments,  specifically
         pledged as security  for, and  dedicated  solely to, the benefit of the
         Holders of such Securities,  (A) money,  denominated in U.S. dollars in
         an  amount,  or (B)  U.S.  Government  Obligations  which  through  the
         scheduled  payment of  principal  and  interest  in respect  thereof in
         accordance with their terms will provide, not later than one day before
         the due date of any payment, money,  denominated in U.S. dollars, in an
         amount, or (C) a combination thereof,  sufficient,  in the opinion of a
         firm of independent  public  accountants  nationally  recognized in the
         United States expressed in a written certification thereof delivered to
         the Trustee,  to pay and  discharge,  and which shall be applied by the
         Trustee  (or  other  qualifying  trustee)  to pay  and  discharge,  the
         principal of and each  installment of interest on the Securities on the
         Stated  Maturity  of such  principal  or  installment  of  interest  in
         accordance  with the terms of this  Indenture  and of such  Securities,
         including   Additional  Amounts,  if  any.  For  this  purpose,   "U.S.
         Government   Obligations"   means   securities   that  are  (x)  direct
         obligations  of the United  States of America  for the payment of which
         its full faith and credit is  pledged  or (y)  obligations  of a Person
         controlled or supervised by and acting as an agency or  instrumentality
         of the United States of America the payment of which is unconditionally
         guaranteed  as a full faith and credit  obligation by the United States
         of America,  which,  in either case,  are not callable or redeemable at
         the option of the issuer  thereof,  and shall also include a depository
         receipt  issued  by a  bank  (as  defined  in  Section  3(a)(2)  of the
         Securities  Act) as custodian with respect to any such U.S.  Government
         Obligation  or a specific  payment of  principal  of or interest on any
         such U.S. Government  Obligation held by such custodian for the account
         of the holder of such  depository  receipt,  provided  that  (except as
         required by law) such custodian is not authorized to make any deduction
         from the amount payable to the holder of such  depository  receipt from
         any amount received by the custodian in respect of the U.S.  Government
         Obligation  or the specific  payment of principal of or interest on the
         U.S. Government Obligation evidenced by such depository receipt.

                  (2) In the case of an election under Section 1202, the Company
         shall have delivered to the Trustee an Opinion of U.S.  Counsel stating
         that (x) the Company has received from or there has been  published by,
         the Internal  Revenue  Service a ruling,  or (y) since the date of this
         Indenture there has been a change in the applicable  Federal income tax
         law, in either case to the effect that,  and based thereon such opinion
         shall confirm that, the Holders of the Outstanding  Securities will not
         recognize gain or loss for U.S. federal income tax purposes as a result
         of such deposit,  Defeasance  and discharge and will be subject to U.S.
         federal  income tax on the same  amount,  in the same manner and at the
         same times as would have been the case if such deposit,  Defeasance and
         discharge had not occurred.

                                      -70-
<PAGE>

                  (3) In the case of an election under Section 1203, the Company
         shall have  delivered to the Trustee an Opinion of U.S.  Counsel to the
         effect  that  the  Holders  of  the  Outstanding  Securities  will  not
         recognize gain or loss for U.S. federal income tax purposes as a result
         of such  deposit and  Covenant  Defeasance  and will be subject to U.S.
         federal  income tax on the same  amount,  in the same manner and at the
         same times as would  have been the case if such  deposit  and  Covenant
         Defeasance had not occurred.

                  (4)  The  Company  shall  have  delivered  to the  Trustee  an
         Officers' Certificate to the effect that the Securities, if then listed
         on any  securities  exchange,  will not be delisted as a result of such
         deposit.

                  (5) Such Defeasance or Covenant Defeasance shall not cause the
         Trustee to have a conflicting  interest within the meaning of the Trust
         Indenture  Act  (assuming  all  Securities  are in  default  within the
         meaning of such Act).

                  (6) No Event of Default or event  which with notice or passage
         of time or both would  become an Event of Default  shall have  occurred
         and  be  continuing  on  the  date  of  such  deposit  or,  insofar  as
         subsections 501(7) and (8) are concerned, at any time during the period
         ending  on the  90th  day  after  the date of such  deposit  (it  being
         understood  that this  condition  shall not be deemed  satisfied  until
         after such 90th day).

                  (7) Such Defeasance or Covenant Defeasance shall not result in
         a breach or  violation  of, or  constitute a default  under,  any other
         agreement or  instrument to which the Company is a party or by which it
         is bound.

                  (8)  The  Company  shall  have  delivered  to the  Trustee  an
         Officers' Certificate and an Opinion of U.S. Counsel, each stating that
         all conditions precedent provided for relating to either the Defeasance
         under  Section 1202 or the Covenant  Defeasance  under Section 1203 (as
         the case may be) have been complied with.

                  (9) Such Defeasance or Covenant Defeasance shall not result in
         the trust arising from such deposit  constituting an investment company
         as defined in the Investment  Company Act of 1940, as amended,  or such
         trust  shall be  qualified  under  such act or exempt  from  regulation
         thereunder,  in each case as set forth in an  Opinion  of U.S.  Counsel
         delivered by the Company to the Trustee.

                  (10) In the case of an election  under  Section  1202 or 1203,
         the Company  shall have  delivered to the Trustee an Opinion of Mexican
         Counsel stating that the Holders of the Outstanding Securities will not
         recognize  gain or loss for Mexican  income tax purposes as a result of
         such deposit,  Defeasance  and discharge and will be subject to Mexican
         income tax on the same  amount in the same manner and at the same times
         as would have been the case if such deposit,  Defeasance  and discharge
         had not occurred.

                  SECTION 1205. Deposited Money and U.S. Government  Obligations
to Be Held in Trust, Other Miscellaneous  Provisions.  Subject to the provisions
of the last paragraph of Section 1003, all money and U.S.
Government Obligations (including the proceeds thereof)

                                      -71-
<PAGE>

deposited  with the  Trustee  (or other  qualifying  trustee--collectively,  for
purposes of this  Section  1205,  the  "Trustee")  pursuant  to Section  1204 in
respect of the Securities shall be held in trust and applied by the Trustee,  in
accordance  with the provisions of such  Securities and this  Indenture,  to the
payment,  either  directly or through any Paying  Agent  (including  the Company
acting as its own Paying Agent) as the Trustee may determine,  to the Holders of
such  Securities,  of all sums due and to  become  due  thereon  in  respect  of
principal and interest,  but such money need not be segregated  from other funds
except to the extent required by law.

                  The Company shall pay and  indemnify  the Trustee  against any
tax,  fee or other  charge  imposed on or assessed  against the U.S.  Government
Obligations  deposited  pursuant to Section 1204 or the  principal  and interest
received in respect  thereof  other than any such tax, fee or other charge which
by law is for the account of the Holders of the Outstanding Securities.

                  Anything   in   this   Article    Twelve   to   the   contrary
notwithstanding,  the Trustee  shall  deliver or pay to the Company from time to
time upon Company Request any money or U.S. Government Obligations held by it as
provided in Section 1204 which,  in the opinion of a nationally  recognized firm
of independent public accountants  expressed in a written  certification thereof
delivered to the Trustee,  are in excess of the amount  thereof which would then
be required  to be  deposited  to effect an  equivalent  Defeasance  or Covenant
Defeasance.

                  SECTION  1206.  Reinstatement.  If the  Trustee  or the Paying
Agent is unable to apply any money in  accordance  with  Section 1202 or 1203 by
reason  of  any  order  or  judgment  of any  court  or  governmental  authority
enjoining,  restraining  or otherwise  prohibiting  such  application,  then the
Company's  obligations  under this Indenture and the Securities shall be revived
and reinstated as though no deposit had occurred pursuant to this Article Twelve
until such time as the Trustee or Paying  Agent is  permitted  to apply all such
money in accordance with Section 1202 or 1203;  provided,  however,  that if the
Company makes any payment of principal of or interest on any Security  following
the  reinstatement  of its  obligations,  the Company shall be subrogated to the
rights of the Holders of such  Securities to receive such payment from the money
held by the Trustee or the Paying Agent.


                          ----------------------------



                  This instrument may be executed in any number of counterparts,
each of which  so  executed  shall be  deemed  to be an  original,  but all such
counterparts shall together constitute but one and the same instrument.

                                      -72-
<PAGE>

                  IN WITNESS  WHEREOF,  the  parties  hereto  have  caused  this
Indenture to be duly executed, and the Trustee has caused its corporate seals to
be  hereunto  affixed  and  attested,  all as of the day and  year  first  above
written.



                              GRUPO INDUSTRIAL DURANGO, S.A. de C.V.



                              By:
                                  ----------------------------------------------
                                  Name:   Dr. JOSE A. RINCON
                                  Title:  President and Chief Operating Officer



                              THE CHASE MANHATTAN BANK,
                                  as Trustee



                              By:
                                  ----------------------------------------------
                                  Name:
                                  Title:

Attest:
<PAGE>

                                                                      SCHEDULE A
                                                                      ----------


Indebtedness/Lender                                          Amount (000)
-------------------                                          ------------
Flooring Rate Notes*                                              $ 7,524
Commisiones y Representaciones                                     10,000
  Delk (Dabdoub)*
Banamex                                                            13,000
Manuel Arellano                                                     8,340
Arrendadora Bankamerica*                                            8,800
Arrendadora Bankamerica                                               767
Banco Bilbao                                                        1,508
Grupo Garcia Franco                                                 3,643
Ponderosa Industrial*                                              15,000
Derivados Forestales*                                              12,000
Cerveceria Cuantemoc                                                2,089
Bancomer+*                                                          7,000
Chase*                                                             10,000
Bancomer+*                                                          6,580
Probursa+*                                                            750
Probursa+*                                                            750
Probursa+                                                             500
Probursa+                                                             484
Cremi+*                                                               424
California Commerce Bank+*                                          3,500
Union+                                                              1,698
Ponderosa Industrial+                                               1,200
Banamex+                                                            3,820
                                                                   ------
                                                                 $119,377


* Indebtedness being refinanced with proceeds from issuance of the Securities.
+ Indebtedness of Subsidiaries under Section 1011(ii)(e).