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                                                                     Exhibit 4.1



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

                          SECURITIES PURCHASE AGREEMENT

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


                                 by and between



                        CORPORACION DURANGO, S.A. DE C.V.



                                       and


                   OPERADORA OMEGA INTERNACIONAL, S.A. DE C.V.





                           dated as of October 7, 2002






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                                TABLE OF CONTENTS



ARTICLE I DEFINITIONS..........................................................1

         SECTION 1.1. Certain Defined Terms....................................1
         SECTION 1.2. Certain Rules of Construction............................5

ARTICLE II SALE AND PURCHASE...................................................5

         SECTION 2.1. Agreement to Purchase and Sell...........................5
         SECTION 2.2. Closing..................................................6
         SECTION 2.3. Purchase Price...........................................6
         SECTION 2.4. Closing Deliveries.......................................6
         SECTION 2.5. Transfer Taxes...........................................6

ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE PURCHASER....................6

         SECTION 3.1. Organization of the Purchaser............................6
         SECTION 3.2. Corporate Power and Authority............................6
         SECTION 3.3. No Conflict..............................................7
         SECTION 3.4. Governmental Consents and Approvals......................7
         SECTION 3.5. Investment...............................................7
         SECTION 3.6. Brokers..................................................7

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE SELLER........................7

         SECTION 4.1. Organization of the Seller...............................7
         SECTION 4.2. Corporate Power and Authority............................7
         SECTION 4.3. Organization and Good Standing of the Company............8
         SECTION 4.4. Capitalization of the Company............................8
         SECTION 4.5. Title to the Securities..................................8
         SECTION 4.6. No Conflict. ............................................8
         SECTION 4.7. Subsidiaries and Equity Interests of the Company.........8
         SECTION 4.8. Governmental Consents and Approvals......................9
         SECTION 4.9. Brokers..................................................9
         SECTION 4.10. No Other Representations................................9

ARTICLE V CERTAIN AGREEMENTS OF THE PARTIES....................................9

         SECTION 5.1. Further Action by the Parties............................9
         SECTION 5.2. Publicity................................................9
         SECTION 5.3. Seller Option...........................................10
         SECTION 5.4. Use of Certain Trademarks and Corporate Names...........10
         SECTION 5.5. Termination of Tax Sharing Agreements...................10

                                       i
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ARTICLE VI CLOSING DELIVERIES.................................................11

         SECTION 6.1. Deliveries by the Seller................................11
         SECTION 6.2. Deliveries by the Purchaser.............................11

ARTICLE VII INDEMNIFICATION...................................................12

         SECTION 7.1. Survival................................................12
         SECTION 7.2. Indemnification Obligations of the Seller...............12
         SECTION 7.3. Indemnification Obligations of the Purchaser............12
         SECTION 7.4. Notice of Claim.........................................13
         SECTION 7.5. Defense.................................................13
         SECTION 7.6. Limitation of Losses....................................14
         SECTION 7.7. Exclusive Remedy........................................14

ARTICLE VIII MISCELLANEOUS....................................................14

         SECTION 8.1. Headings................................................15
         SECTION 8.2. Entire Agreement........................................15
         SECTION 8.3. Notices.................................................15
         SECTION 8.4. Governing Law; Jurisdiction; Waiver of Jury Trial.......16
         SECTION 8.5. Severability; Partial Invalidity........................17
         SECTION 8.6. Amendments; Waivers.....................................17
         SECTION 8.7. Counterparts; Facsimile Signatures......................17
         SECTION 8.8. Assignments and Permitted Transfers.....................17
         SECTION 8.9. Benefits Only to Parties................................17

                                       ii

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                  THIS SECURITIES PURCHASE AGREEMENT, dated as of October 7,
2002, is entered into by and between Corporacion Durango, S.A. de C.V., a
Mexican SOCIEDAD ANONIMA DE CAPITAL VARIABLE (the "SELLER"), and Operadora Omega
Internacional, S.A. de C.V., a Mexican SOCIEDAD ANONIMA DE CAPITAL VARIABLE (the
"PURCHASER" and, together with the Seller, the "PARTIES").


                              W I T N E S S E T H:
                               - - - - - - - - - -


                  WHEREAS, the Seller is (i) the owner of 1,000 issued and
outstanding shares of common stock, no par value, of Durango Paper Company, a
Delaware corporation (the "Company"), representing one hundred percent (100%) of
the total issued and outstanding capital stock of the Company (the "Shares") and
(ii) the holder of certain promissory notes made by the Company, in the
aggregate principal amount of $128,834,605.34 (the "Notes" and, together with
the Shares, the "Securities"); and

                  WHEREAS, the Seller proposes to sell to the Purchaser, and the
Purchaser proposes to purchase from the Seller, the Securities, in each case
upon the terms and conditions hereinafter set forth;

                  NOW, THEREFORE, in consideration of the premises and the
mutual agreements, covenants and provisions contained herein, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties hereby agree as follows:

                                   ARTICLE I

                                   DEFINITIONS

                  SECTION 1.1. Certain Defined Terms. As used in this Agreement,
the following terms shall have the following meanings:

                  "Affiliate" means, with respect to any Person, at any time,
(i) any other Person directly or indirectly controlling, controlled by, or under
common control with such Person or (ii) any other Person owning more than 10% of
the outstanding voting stock of such Person. A Person shall be deemed to
"control" another Person if such Person possesses, directly or indirectly, the
power to direct or cause the direction of the management and policies of such
other Person, whether through the ownership of voting securities, by contract or
otherwise.

                  "Agreement" means this Securities Purchase Agreement,
including any Exhibits, Schedules and Annexes hereto, as the same may be
modified, supplemented or amended from time to time in accordance with the terms
set forth herein.

                  "Business Day" means (i) with respect to the determination of
the Interest Determination Date or any Interest Period, a day (other than a
Saturday or Sunday) on which banks generally are open in London for the conduct
of substantially all of their commercial lending activities and on which
dealings in U.S. Dollars are carried on in the London interbank market and (ii)
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for all other purposes, a day (other than a Saturday or Sunday) on which banks
generally are open in New York, New York and Mexico City, Mexico for the conduct
of substantially all of their commercial lending activities.

                  "Closing" has the meaning set forth in Section 2.2.

                  "Closing Date" has the meaning set forth in Section 2.2.

                  "Company" has the meaning set forth in the Recitals.

                  "Contract" means, with respect to any Person, all contracts,
agreements, warranties, guaranties, indentures, debentures, bonds, notes,
instruments, options, deeds of trust, leases, mortgages, security agreements,
easements, licenses, concessions, grants, commitments, undertakings or binding
arrangements of any nature whatsoever, express or implied, written or oral,
entered into or binding upon such Person or to which the property or assets of
such Person may be subject.

                  "Exercise Notice" has the meaning set forth in Section 5.3(a).

                  "Governmental Authority" means any court or other tribunal,
any authority, agency, board, body, bureau, commission or instrumentality of any
government, or any other entity exercising legislative, judicial, regulatory or
administrative functions of or pertaining to government.

                  "Guarantee" means any obligation, contingent or otherwise, of
any Person directly or indirectly guaranteeing (whether pursuant to a guaranty,
a FIANZA, an AVAL or otherwise) any obligation of any other Person and, without
limiting the generality of the foregoing, any obligation, direct or indirect,
contingent or otherwise, of such Person:

                  (a) to purchase or pay (or advance or supply funds for the
         purchase or payment of) such obligation of such other Person (whether
         arising by virtue of partnership arrangements, or by agreements to
         keep-well, to purchase assets, goods, securities or services (unless
         such purchase arrangements are on arm's-length terms and are entered
         into in the ordinary course of business), to take-or-pay, or to
         maintain financial statement conditions or otherwise) or

                  (b) entered into for purposes of assuring in any other manner
         the obligee of such 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" shall not include endorsements for collection
or deposit in the ordinary course of business.

                                       2
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                  "HG Estate Notes" means:

                  (a) that certain Promissory Note of Durango, dated May 28,
         2002, in favor of HG Estate, LLC and St. Marys Railroad Corporation in
         the principal amount of US$29,998,062.26;

                  (b) that certain Note A of Durango, dated May 28, 2002, in
         favor of HG Estate, LLC in the principal amount of US$12,100,000.00;
         and

                  (c) that certain Note B of Durango, dated May 28, 2002, in
         favor of HG Estate, LLC in the principal amount of US$6,000,000.00.

                  "Indemnified Party" means a Purchaser Indemnified Party or a
Seller Indemnified Party, as applicable.

                  "Indemnifying Party" means (i) the Seller, with respect to
Losses for which the Purchaser Indemnified Parties are entitled to
indemnification under Section 7.2, or (ii) the Purchaser, with respect to Losses
for which the Seller Indemnified Parties are entitled to indemnification under
Section 7.3, as applicable.

                  "Interest Determination Date" shall mean the second (2nd)
Business Day prior to the commencement of any Interest Period.

                  "Interest Period" shall mean: (i) initially, the period
commencing on the Closing Date and ending one (1) month after the Closing Date
and (ii) thereafter, each subsequent period commencing on the last day of the
next preceding Interest Period and ending one (1) month thereafter, PROVIDED
that:

                  (a) if any Interest Period would otherwise expire on a day
         that is not a Business Day, such Interest Period shall expire on the
         next succeeding Business Day unless the result of such extension would
         be to carry such Interest Period into another calendar month, in which
         event such Interest Period shall expire on the immediately preceding
         Business Day;

                  (b) any Interest Period that begins on the last Business Day
         of a calendar month (or on a day for which there is no numerically
         corresponding day in the calendar month at the end of such Interest
         Period) shall, subject to clause (c) below, expire on the last Business
         Day of the calendar month which is the specified number of months after
         the commencement of such Interest Period; and

                  (c) any Interest Period that would otherwise extend beyond the
         Option Closing Date shall expire on the Option Closing Date.

                  "Law" means any federal, state, local or foreign law, statute,
ordinance, regulation, rule, code, order, writ, judgment, injunction, decree,
directive, stipulation, determination, award, requirement or other pronouncement
having the effect of law, issued by or on behalf of any Governmental Authority.

                                       3
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                  "LIBOR" means the offered quotation to first-class banks in
the London interbank market by Citibank, N.A. for U.S. Dollar deposits of
amounts comparable to the Purchase Price with maturities comparable to the
applicable Interest Period, determined as of 11:00 A.M. (London time) on the
Interest Determination Date.

                  "Licensed Trademarks" means any trademarks, trademark
applications, service marks, service mark applications, corporate names, trade
names, trade dress and logos that incorporate the name "Durango".

                  "Lien" means any mortgage, security interest, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, easement, lease,
third-party interest, lien (statutory or otherwise), charge, preference,
priority or security agreement, any option, warrant, attachment or right of
first refusal and any preemptive, conversion, put, call, claim or right or
restriction on transfer (other than restrictions imposed by applicable
Securities Laws).

                  "Option" has the meaning set forth in Section 5.3(a).

                  "Option Closing Date" has the meaning set forth in Section
5.3(a).

                  "Option Price" has the meaning set forth in Section 5.3(a).

                  "Option Shares" has the meaning set forth in Section 5.3(c).

                  "Parties" has the meaning set forth in the Preamble.

                  "Person" means any individual, corporation, limited liability
company, partnership, joint venture, firm, association, trust or any other
business, organization or entity, or any Governmental Authority.

                  "Purchase Price" has the meaning set forth in Section 2.3.

                  "Purchaser" has the meaning set forth in the Preamble.

                  "Purchaser Indemnified Parties" has the meaning set forth in
Section 7.2.

                  "Seller" has the meaning set forth in the Preamble.

                  "Seller Indemnified Parties" has the meaning set forth in
Section 7.3.

                  "Securities Law" means any of (i) the United States Securities
Act of 1933, as amended, and the rules and regulations promulgated thereunder,
as in effect from time to time; (ii) the United States Securities Exchange Act
of 1934, as amended, and the rules and regulations promulgated thereunder, as in
effect from time to time; (iii) any other U.S. federal or state securities Laws;
and (iv) the securities Laws of any other country or jurisdiction.

                  "Shares" has the meaning set forth in the Recitals.

                                       4
<PAGE>

                  "Subsidiary" and "Subsidiaries" each have the meaning set
forth in Section 4.7.

                  "Taxes" means any and all taxes, fees, levies, duties,
tariffs, imposts, and other charges of any kind (together with any and all
interest, penalties, additions to tax and additional amounts imposed with
respect thereto) imposed by any Governmental Authority, including: taxes or
other charges on or with respect to income, franchises, windfall or other
profits, gross receipts, property, sales, use, capital stock, payroll,
employment, social security, workers' compensation, unemployment compensation,
or net worth; taxes or other charges in the nature of excise, withholding, ad
valorem, stamp, transfer, value added, or gains taxes; license, registration and
documentation fees; and customs duties, tariffs, and similar charges.

                  "Tax Returns" means all returns, claims for refund,
declarations, reports, information returns and statements relating to Taxes,
including any schedules or attachments thereto and supporting records.

                  "U.S. Dollars" and "U.S.$" each means the lawful currency of
the United States of America.

                  SECTION 1.2. Certain Rules of Construction.

                  (a) Any term defined herein in the singular form shall have a
comparable meaning when used in the plural form, and vice versa.

                  (b) When used herein, the words "hereof," "herein" and
"hereunder" and words of similar import shall refer to this Agreement as a whole
and not to any particular provision of this Agreement. References to the
Preamble, Recitals, Articles or Sections shall refer respectively to the
Preamble, Recitals, Articles or Sections of this Agreement, unless otherwise
expressly provided.

                  (c) When used herein, the terms "include," "includes," and
"including" are not limiting.

                  (d) Unless the context requires otherwise, derivative forms of
any term defined herein shall have a comparable meaning to that of such term.

                  (e) When a Party's consent is required hereunder, such Party's
consent may be granted or withheld in such Party's sole discretion, unless
otherwise specified.

                                   ARTICLE II

                                SALE AND PURCHASE

                  SECTION 2.1. Agreement to Purchase and Sell. Upon the terms
and subject to the conditions of this Agreement, at the Closing, the Seller will
sell, assign, endorse, transfer and deliver to the Purchaser, and the Purchaser
will purchase and acquire from the Seller, all right, title and interest of the
Seller in the Securities, free and clear of all Liens.

                                       5
<PAGE>

                  SECTION 2.2. Closing. Upon the terms and subject to the
conditions of this Agreement, the transactions contemplated by this Agreement
shall take place at a closing (the "Closing") to be held at the offices of White
& Case LLP, 200 South Biscayne Boulevard, Miami, Florida, United States, at
10:00 a.m., Miami time, on the date hereof, or at such other place or at such
other time or on such other date as the Purchaser and the Seller may mutually
agree (the day on which the Closing takes place being the "Closing Date").

                  SECTION 2.3. Purchase Price. The aggregate amount of cash
(such amount referred to as the "Purchase Price") to be paid by the Purchaser to
the Seller at the Closing shall be equal to an aggregate amount of U.S.$100,000,
to be allocated among the Shares and the Notes as the parties may mutually
agree. The Purchase Price shall be paid on the Closing Date to the Seller by
wire transfer of immediately available U.S. Dollars in accordance with the wire
instructions set forth on Annex A.

                  SECTION 2.4. Closing Deliveries. At the Closing, the Purchaser
and the Seller shall each deliver or cause to be delivered each of the items
required to be delivered by them as set forth in Article VI.

                  SECTION 2.5. Transfer Taxes. All transfer, documentary, sales,
use, stamp, registration and other such Taxes and fees payable in connection
with the sale and transfer of the Securities to the Purchaser shall be paid by
the Seller when due, and the Seller will, at its own expense, file all necessary
Tax Returns and other documentation with respect to all transfer, documentary,
sales, use, stamp, registration and other Taxes and fees, and, if required by
applicable Law, the Seller will, and will cause its Affiliates to, join in the
execution of any such Tax Returns and other documentation.

                                  ARTICLE III

                 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

                  As an inducement to the Seller to enter into this Agreement,
the Purchaser hereby represents and warrants to the Seller as of the Closing
Date as follows:

                  SECTION 3.1. Organization of the Purchaser. The Purchaser is a
SOCIEDAD ANONIMA DE CAPITAL VARIABLE duly formed and validly existing under the
laws of Mexico and has all requisite corporate power and authority to own,
operate or lease its properties and assets and to carry on its business as it
has been and is currently conducted and to perform all of its obligations.

                  SECTION 3.2. Corporate Power and Authority. The execution and
delivery by the Purchaser of this Agreement, the performance by the Purchaser of
its obligations hereunder and the consummation of the transactions contemplated
herein have been duly authorized by all requisite action on the part of the
Purchaser. This Agreement has been duly executed and delivered by the Purchaser,
and, assuming the due execution and delivery hereof by the Seller, constitutes
the legal, valid and binding obligation of the Purchaser, enforceable against
the Purchaser in accordance with its terms.

                                       6
<PAGE>

                  SECTION 3.3. No Conflict. The execution, delivery and
performance by the Purchaser of this Agreement and the consummation of the
transactions contemplated herein does not and will not (i) conflict with, result
in any breach of, constitute a default (or event which with the giving of notice
or lapse of time, or both, would become a default) under, require any consent
under, or give to others any rights of termination, amendment, acceleration,
suspension, revocation or cancellation of, or result in the creation of any Lien
on any of the assets or properties of the Purchaser, or result in any imposition
or acceleration of any payment, time of payment, vesting or increase in the
amount of compensation or benefit payable, pursuant to any Contract, (ii)
violate or conflict with any Law applicable to the Purchaser or any of its
assets or properties or any other restriction of any kind or character to which
the Purchaser or any of its assets or properties is subject or (iii) conflict
with or violate any provision of the organizational documents of the Purchaser.

                  SECTION 3.4. Governmental Consents and Approvals. The
execution, delivery and performance by the Purchaser of this Agreement and the
consummation of the transactions contemplated herein do not and will not require
any consent, approval, authorization or other order of, action by, filing with
or notification to any Governmental Authority.

                  SECTION 3.5. Investment. The Purchaser is acquiring the
Securities for investment for its own account and not with a view to, or for
resale in connection with, any distribution thereof.

                  SECTION 3.6. Brokers. No broker, finder or investment bank is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Purchaser for which the Seller will be responsible.

                                   ARTICLE IV

                  REPRESENTATIONS AND WARRANTIES OF THE SELLER

                  As an inducement to the Purchaser to enter into this
Agreement, the Seller hereby represents and warrants to the Purchaser as of the
Closing Date as follows:

                  SECTION 4.1. Organization of the Seller. The Seller is a
SOCIEDAD ANONIMA DE CAPITAL VARIABLE duly formed and validly existing under the
laws of Mexico and has all requisite corporate power and authority to own,
operate or lease its properties and assets and to carry on its business as it
has been and is currently conducted and to perform all of its obligations.

                  SECTION 4.2. Corporate Power and Authority. The execution and
delivery by the Seller of this Agreement, the performance by the Seller of its
obligations hereunder and the consummation by the Seller of the transactions
contemplated herein have been duly authorized by all requisite action on the
part of the Seller. This Agreement has been duly executed and delivered by the
Seller, and, assuming the due execution and delivery by each of the other
parties thereto, constitutes the legal, valid and binding obligation of the
Seller, enforceable against the Seller in accordance with their respective
terms.

                                       7
<PAGE>

                  SECTION 4.3. Organization and Good Standing of the Company.
The Company is a corporation duly organized, validly existing and in good
standing under the laws of Delaware and has all necessary power and authority to
own, operate or lease the properties and assets now owned, operated or leased by
it and to carry on its business as it has been and is currently conducted.

                  SECTION 4.4. Capitalization of the Company. The authorized
capital stock of the Company consists of 3,000 shares of common stock, no par
value. The Shares represent one hundred percent (100%) of the total issued and
outstanding capital stock of the Company and are duly authorized, validly
issued, fully subscribed to and paid for and non-assessable, and are free and
clear of any Liens. There are no options, warrants, convertible securities,
treasury securities, subscriptions, stock appreciation rights, phantom stock
plans or stock equivalents or other rights, agreements, arrangements or
commitments (contingent or otherwise) of any character issued or authorized
relating to the issued or unissued capital stock or ownership interests of the
Company obligating it to issue or sell any shares of capital stock or ownership
interests of, or options, warrants, convertible securities, subscriptions or
other equity interests in, the Company. There are no outstanding contractual
obligations to repurchase, redeem or otherwise acquire any shares of capital
stock or equity interests in the Company or to pay any dividend or make any
other distribution in respect thereof or to provide funds to, or make any
investment (in the form of a loan, capital contribution or otherwise) in, any
Person.

                  SECTION 4.5. Title to the Securities. Immediately prior to the
Closing, the Seller is the sole beneficial owner of the Securities. At Closing,
the Seller will convey good and marketable title to the Securities, free and
clear of all Liens.

                  SECTION 4.6. No Conflict. The execution, delivery and
performance by the Seller of this Agreement and the consummation of the
transactions contemplated herein does not and will not (a) conflict with, result
in any breach of, constitute a default (or event which with the giving of notice
or lapse of time, or both, would become a default) under, require any consent
under, or give to others any rights of termination, amendment, acceleration,
suspension, revocation or cancellation of, or result in the creation of any Lien
on any of the assets or properties of the Seller, or result in any imposition or
acceleration of any payment, time of payment, vesting or increase in the amount
of compensation or benefit payable, pursuant to any Contract of the Seller, (b)
violate or conflict with any Law applicable to the Seller or any of its assets
or properties or any other restriction of any kind or character to which the
Seller or any of its assets or properties is subject or (c) conflict with or
violate any provision of the organizational documents of the Seller.

                  SECTION 4.7. Subsidiaries and Equity Interests of the Company.
Schedule 4.7 sets forth a true and complete list of all direct or indirect
subsidiaries of the Company (each individually, a "Subsidiary" and,
collectively, the "Subsidiaries"). There are no other corporations,
partnerships, joint ventures, associations or other entities in which the
Company owns, of record or beneficially, any direct or indirect equity or other
interest or any right (contingent or otherwise) to acquire the same. All of the
issued and outstanding shares of capital stock of the Subsidiaries have been
duly authorized, validly issued, fully subscribed to and paid for and
non-assessable, and are free and clear of any Liens. There are no options,

                                       8
<PAGE>

warrants, convertible securities, treasury securities, subscriptions, stock
appreciation rights, phantom stock plans or stock equivalents or other rights,
agreements, arrangements or commitments (contingent or otherwise) of any
character issued or authorized relating to the issued or unissued capital stock
or ownership interests of any Subsidiary obligating such Subsidiary to issue or
sell any shares of capital stock or ownership interests of, or options,
warrants, convertible securities, subscriptions or other equity interests in,
such Subsidiary.

                  SECTION 4.8. Governmental Consents and Approvals. The
execution, delivery and performance by the Seller of this Agreement and the
consummation of the transactions contemplated herein do not and will not require
any consent, approval, authorization or other order of, action by, filing with
or notification to any Governmental Authority.

                  SECTION 4.9. Brokers. No broker, finder or investment bank is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Seller for which the Purchaser will be responsible.

                  SECTION 4.10. No Other Representations. Except for the
representations and warranties contained in this Article IV, the Seller does not
make any express or implied representation or warranty, and the Seller disclaims
any such representation or warranty, whether by the Seller, the Company or any
of their respective officers, directors, employees, agents or representatives or
any other Person, with respect to the execution and delivery of this Agreement
or the consummation of the transactions contemplated hereby or the business or
assets of the Company, notwithstanding the delivery or disclosure to the
Purchaser, any of its officers, directors, employees, agents or representatives
or any other Person of any documentation or other information with respect to
the foregoing. The Purchaser hereby acknowledges and agrees that, except as set
forth in Article IV, the Purchaser is purchasing the Securities on an "As-Is"
and "Where-Is" basis.

                                   ARTICLE V

                        CERTAIN AGREEMENTS OF THE PARTIES

                  SECTION 5.1. Further Action by the Parties. On and after the
date hereof, each Party shall take such other actions and execute such other
documents as are necessary or desirable to carry out the intent and purpose of
this Agreement.

                  SECTION 5.2. Publicity. None of the Parties will release,
generate or permit any press release, public statement or other publicity
concerning this Agreement or the transactions contemplated herein nor submit
this Agreement or any document relating thereto to any Governmental Authority,
without first consulting with and obtaining the written consent of the other
Party, except to the extent required by Law.

                                       9
<PAGE>





                  SECTION 5.3. Seller Option.

                  (a) The Purchaser hereby grants to the Seller the irrevocable
right, but not the obligation (the "Option"), to purchase, at any time after the
date hereof and on or prior to the tenth anniversary of the date hereof, all,
but not less than all, of the issued and outstanding shares of capital stock of
the Company (the "Option Shares") and the Notes, at an aggregate exercise price
(the "Option Price") equal to the Purchase Price plus interest accruing at a
rate equal to LIBOR plus four percent (4%). The Seller may exercise the Option
by giving the Purchaser at least five (5) Business Day's prior written notice
(the "Exercise Notice").

                  (b) On the closing date of the exercise of the Option (the
"Option Closing Date"): (i) the Purchaser shall deliver to the Seller the Option
Shares and the Notes, free and clear of all Liens, by delivery of appropriate
transfer documents, duly endorsed in favor of the Seller, and with all required
transfer tax and other revenue stamps, acquired at the Purchaser's expense,
affixed; and (ii) the Seller shall deliver to the Purchaser in exchange therefor
the Option Price in cash, payable by wire transfer of immediately available U.S.
Dollars in accordance with wire instructions set forth in the Exercise Notice.

                  (c) The Purchaser shall not at any time prior to the Option
Closing Date (i) sell, or enter into any agreement (other than this Agreement)
to sell, any of the Option Shares or shares of capital stock of any Subsidiary
or the Notes, (ii) subject any of the Option Shares or shares of capital stock
of any Subsidiary or the Notes to any Liens (other than Liens imposed by this
Agreement) or (iii) sell any assets of the Company or any Subsidiary, other than
inventory sold in the ordinary course of business or pursuant to existing
commitments or in amounts that are not material.

                  SECTION 5.4. Use of Certain Trademarks and Corporate Names.
After the Closing Date, the Purchaser shall not, and shall cause each of the
Company, the Subsidiaries and their respective Affiliates not to, use any trade
names, corporate names, trademarks, service marks, trade dress, and logos,
together with all translations, adaptations, derivations and combinations
thereof and including all goodwill associated therewith, and all applications,
registrations and renewals in connection therewith, which incorporate the
Licensed Trademarks or any derivation in whole or in part thereof, individually
or in combination, in any way. The Purchaser will, within one week following the
Closing Date, change the corporate names of the Company and each of the
Subsidiaries that incorporate the name "Durango" to another corporate name that
does not incorporate the name "Durango".

                  SECTION 5.5. Termination of Tax Sharing Agreements. Any tax
sharing agreement between the Seller, on the one hand, and any of the Company
and any of its subsidiaries, on the other hand, is hereby terminated and will
have no further effect for any taxable year (whether the current year, a future
year or a past year).

                                       10
<PAGE>

                                   ARTICLE VI

                               CLOSING DELIVERIES

                  SECTION 6.1. Deliveries by the Seller. On or prior to the
Closing Date, the Seller shall deliver, or cause to be delivered, to the
Purchaser, in form and substance reasonably satisfactory to the Purchaser, the
following:

                  (a) Stock certificates or other evidence of ownership
representing the Shares, duly endorsed in favor of the Purchaser, or accompanied
by stock powers duly executed in favor of the Purchaser, and with all required
stock transfer tax and other revenue stamps, acquired at the Seller's expense,
affixed;

                  (b) The Notes, duly endorsed in favor of the Purchaser, and
with all required transfer taxes and other stamps, acquired at the Seller's
expense, affixed;

                  (c) A certificate duly executed by the Chief Financial Officer
of the Seller, in the form of Exhibit 6.1(b) hereto, dated as of the Closing
Date, certifying the accuracy of the Seller's representations and warranties set
forth in Article IV hereunder and that the Seller has performed and complied
with all agreements, covenants and agreements required hereunder;

                  (d) A certificate duly executed by the Secretary of the
Seller, in the form of Exhibit 6.1(c) hereto, dated as of the Closing Date, as
to the ESTATUTOS of the Seller, the resolutions adopted by the Board of
Directors of the Seller in connection with this Agreement and the incumbency of
certain officers of the Seller; and

                  (e) An Assignment of Claims, in the form of Exhibit 6.1(d)
hereto, dated as of the Closing Date, duly executed by the Company in favor of
the Seller assigning any and all claims of the Company against HG Estate, LLC,
St. Marys Railroad Corporation and W.O. Corporation arising under the Stock
Purchase Agreement, dated as of December 9, 1999, among HG Estate, LLC, St.
Marys Railroad Corporation, W.O. Corporation and the Company to the Seller.

                  SECTION 6.2. Deliveries by the Purchaser. On or prior to the
Closing Date, the Purchaser shall deliver, or cause to be delivered, to the
Seller, in form and substance reasonably satisfactory to the Seller, the
following:

                  (a) The Purchase Price;

                  (b) A certificate duly executed by the Chief Operating Officer
of the Purchaser, in the form of Exhibit 6.2(b) hereto, dated as of the Closing
Date, certifying the accuracy of the Purchaser's representations and warranties
set forth in Article III hereunder and that the Purchaser has performed and
complied with all agreements, covenants and agreements required hereunder; and

                  (c) A certificate duly executed by the Secretary of the
Purchaser, in the form of Exhibit 6.2(c) hereto, dated as of the Closing Date,
as to the ESTATUTOS of the Purchaser, the

                                       11
<PAGE>

resolutions adopted by the Board of Directors of the Purchaser in connection
with this Agreement and the incumbency of certain officers of the Purchaser.

                                   ARTICLE VII

                                 INDEMNIFICATION

                  SECTION 7.1. Survival. The representations and warranties
contained in this Agreement shall survive the Closing until the first
anniversary of the Closing Date and shall thereupon expire together with any
right to indemnification in respect thereof; PROVIDED, HOWEVER, that the
representations and warranties of the Purchase set forth in Sections 3.1 and 3.2
and the representations and warranties of the Seller set forth in Sections 4.1,
4.2, 4.3 and 4.5 shall not be extinguished, but shall survive and continue in
full force and effect.

                  SECTION 7.2. Indemnification Obligations of the Seller. The
Seller will indemnify, defend and hold harmless the Purchaser, the Company,
their Affiliates, and their respective successors or assigns and officers,
directors, employees, agents and representatives (other than any Person who is
obligated to indemnify any Purchaser Indemnified Party in this Agreement in his,
her or its capacity as a Seller) (collectively, the "Purchaser Indemnified
Parties") from and against any and all claims, liabilities, obligations, losses,
costs (including court costs), expenses (including costs of investigation and
defense and attorneys', accountants' and experts' fees and expenses), increases
in insurance premiums or retroactive premium adjustments, penalties, fines,
judgments and damages suffered or incurred (including amounts paid in
settlement, costs of investigation and reasonable attorneys' fees and expenses)
(collectively "Losses") by the Purchaser Indemnified Parties as a result of:

                  (a) any breach or inaccuracy of any representation or warranty
made by the Seller in this Agreement;

                  (b) any breach of any covenant, agreement or undertaking made
by the Seller in this Agreement; or

                  (c) any Taxes in connection with the transfer of the
Securities to the Purchaser pursuant to this Agreement.

                  SECTION 7.3. Indemnification Obligations of the Purchaser. The
Purchaser will indemnify and hold harmless the Seller and its Affiliates, and
their respective successors or assigns and officers, directors, employees,
agents and representatives (the "Seller Indemnified Parties") from and against
any and all Losses as a result of:

                  (a) any breach or inaccuracy of any representation or warranty
made by the Purchaser in this Agreement;

                  (b) any breach of any covenant, agreement or undertaking made
by the Purchaser in this Agreement;

                                       12
<PAGE>

                  (c) the conduct by the Company or any of its Subsidiaries of
their respective businesses after the Closing Date;

                  (d) any amounts paid by the Seller under any Guarantee by the
Seller existing on the Closing Date of any obligation of the Company or any of
the Subsidiaries; or

                  (e) any amount paid by the Seller pursuant to any of the HG
Estate Notes.

                  SECTION 7.4. Notice of Claim. The Indemnified Party shall
promptly notify the Indemnifying Party of any claim with respect to which such
Indemnified Party may be entitled to receive payment from the Indemnifying Party
for any Losses, specifying in reasonable detail the nature of the Loss, and, if
known, the amount, or an estimate of the amount, of the liability arising
therefrom; PROVIDED that any delay in notifying the Indemnifying Party will
relieve the Indemnifying Party from liability under this Agreement only if, and
only to the extent that, such delay actually prejudices the rights, remedies or
defenses otherwise available to it with respect to such claim. The Indemnified
Party shall provide to the Indemnifying Party, as promptly as practicable after
giving notice of such claim, information and documentation reasonably requested
by the Indemnifying Party to support and verify the claim asserted, unless the
Indemnified Party has been advised by counsel that there are no reasonable
grounds to assert a joint defense privilege with respect to such information and
documentation.

                  SECTION 7.5. Defense.


                  (a) If the facts pertaining to a Loss arise out of the claim
of any third party, or if there is any claim against a third party available by
virtue of the circumstances of the Loss, the Indemnifying Party shall have the
right to participate in, or by giving written notice to the Indemnified Party,
to elect to assume the defense of, or take full responsibility for, such audit,
investigation, action, claim or proceeding, including the employment of counsel
or accountants, in each case reasonably satisfactory to the Indemnified Party,
and the payment of the fees and disbursements of such counsel. If the
Indemnifying Party declines or fails to assume the defense of, or take full
responsibility for, the audit, investigation, action, claim or proceeding on the
terms provided above or to employ counsel reasonably satisfactory to the
Indemnified Party, in either case within ten (10) Business Days following
receipt by the Indemnifying Party of notice of the claim, then the Indemnified
Party may employ counsel to represent or defend it in any such audit,
investigation, action, claim or proceeding and the Indemnifying Party will pay
the reasonable fees and disbursements of such counsel as incurred. In any audit,
investigation, action, claim or proceeding for which the Indemnifying Party has
assumed the defense, the Indemnified Party shall have the right to participate
in such matter and to retain its own counsel at the Indemnified Party's own
expense (except that the Indemnifying Party shall be responsible for the fees
and expenses of the separate co-counsel to the extent the Indemnified Party
reasonably concludes that the counsel the Indemnifying Party has selected has a
conflict of interest). The Indemnifying Party shall at all times use reasonable
efforts to inform the Indemnified Party of the status of the defense of any
matter the defense of which the Indemnifying Party has assumed and to cooperate
in good faith with the Indemnified Party with respect to the defense of any such
matter.

                                       13
<PAGE>

                  (b) No Indemnified Party may settle or compromise any claim or
consent to the entry of any judgment with respect to which indemnification is
being sought hereunder without the prior written consent, which shall not be
unreasonably delayed or withheld, of the Indemnifying Party. No Indemnifying
Party may settle or compromise any claim or consent to the entry of any judgment
with respect to which indemnification is being sought hereunder without the
prior written consent, which shall not be unreasonably delayed or withheld, of
the Indemnified Party, unless such settlement, compromise or consent (A)
includes an unconditional release of the Indemnified Party and its officers,
directors, employees and Affiliates from all liability arising out of such
claim, and (B) does not impose an injunction or other equitable relief upon the
Indemnified Party.

                  (c) Whether or not the Indemnifying Party chooses to defend a
claim, all Parties shall cooperate in the defense thereof and shall furnish such
records, information and testimony, and attend such conferences, discovery
proceedings, hearings, trials and appeals, as may be reasonably requested in
connection therewith. The Indemnifying Party shall be subrogated to all rights
and remedies of the Indemnified Party.

                  SECTION 7.6. Limitation of Losses.


                  (a) The indemnification obligations set forth in this
Agreement, including in this Article VII, shall be limited to indemnification
for actual damages suffered and shall not include loss of profit, incidental,
consequential, special, punitive or indirect damages; PROVIDED, HOWEVER, that
any such loss of profit damages recovered by a third party against a party
entitled to indemnity under this Agreement shall be included in the damages
recoverable pursuant to the indemnities herein.

                  (b) The payment of all indemnifications under Section 7.2 and
payment of all claims made by the Purchaser Indemnified Parties for
indemnification hereunder, for whatever reason, shall be limited to, and shall
not exceed an amount equal to the Purchase Price.

                  (c) No Party shall be entitled to indemnification under this
Article VII (i) to the extent, if any, that any Losses result from a failure on
the part of any Indemnified Party to exercise good faith in not jeopardizing or
prejudicing the interests of the Indemnifying Party or otherwise arises out of
any action taken or omitted to be taken by an Indemnified Party or (ii) unless
and until all rights and remedies of an Indemnified Party or its Affiliates
(including after the Closing Date the Company, in the case of a Purchaser
Indemnified Party) under any insurance policy or any other obligation of
indemnification in its favor shall have first been exhausted.

                  SECTION 7.7. Exclusive Remedy. The indemnification provided in
this Article VII shall constitute the exclusive remedy with respect to any
dispute arising out of or related to this Agreement or any Loss which any Party
may suffer, sustain or become subject to, as a result of or relating to this
Agreement and the transactions contemplated hereby.

                                       14
<PAGE>

                                  ARTICLE VIII

                                  MISCELLANEOUS

                  SECTION 8.1. Headings. The headings in this Agreement are for
convenience of reference only and shall not control or affect the meaning or
construction of any provisions hereof.

                  SECTION 8.2. Entire Agreement. This Agreement constitutes the
entire agreement and understanding of the Parties in respect of the subject
matter contained herein, and there are no restrictions, promises,
representations, warranties, covenants, or undertakings with respect to the
subject matter hereof, other than those expressly set forth or referred to
herein. This Agreement supersedes all prior agreements and understandings
between the Parties with respect to the subject matter hereof.

                  SECTION 8.3. Notices. All notices or other communications
required or permitted by this Agreement shall be in writing and shall be deemed
to have been duly received (a) if given by telecopier, when transmitted and the
appropriate telephonic confirmation is received if transmitted on a Business Day
and during normal business hours of the recipient, and otherwise on the next
Business Day following transmission, (b) if given by certified or registered
mail, return receipt requested, postage prepaid, when received and (c) if given
by courier or other means, when received or personally delivered, and, in any
such case, addressed as set forth below (or as otherwise provided by prior
notice to each other Party):

                  if to the Purchaser to:

                  Operadora Omega Internacional, S.A. de C.V.
                  Homero 1425
                  Suite 1102
                  Col. Morales Polanco
                  Mexico D.F., Mexico 11560
                  Attention: Martin Rincon
                  Facsimile: +011-52 (555) 557-0399
                  Telephone: +011-52 (555) 557-0080

                  if to the Seller to:

                  Corporacion Durango, S.A. de C.V.
                  Torre Corporativa Durango
                  Potasio 150
                  Cuidad Industrial
                  Durango, Durango, Mexico 34220
                  Attention:  Mayela Rincon de Velasco
                  Facsimile:  011-52 (618) 814-0048
                  Telephone:  011-52 (618) 814-1658

                                       15
<PAGE>

                  with a copy to:

                  White & Case LLP
                  First Union Financial Center
                  200 South Biscayne Boulevard
                  Suite 4900
                  Miami, Florida 33131-2352
                  Attention:  Emilio Alvarez-Farre
                  Facsimile:  (305) 358-5744
                  Telephone:  (305) 371-2700

                  SECTION 8.4. Governing Law; Jurisdiction; Waiver of Jury
Trial.


                  (a) THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK. ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE
STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK
SITTING IN THE BOROUGH OF MANHATTAN, AND, BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH PARTY HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF
ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
COURTS. THE SELLER HEREBY IRREVOCABLY DESIGNATES, APPOINTS AND EMPOWERS DURANGO
MCKINLEY PAPER COMPANY WITH OFFICES ON THE DATE HEREOF AT 5605 NORTH MACARTHUR
BLVD., SUITE 360, IRVING, TEXAS 75038, ATTENTION: PRUDENCIO CALDERON, AS ITS
DESIGNEE, APPOINTEE AND AGENT TO RECEIVE, ACCEPT AND ACKNOWLEDGE FOR AND ON ITS
BEHALF, AND IN RESPECT OF ITS PROPERTY, SERVICE OF ANY AND ALL LEGAL PROCESS,
SUMMONS, NOTICES AND DOCUMENTS WHICH MAY BE SERVED IN ANY SUCH ACTION OR
PROCEEDING. THE PURCHASER HEREBY IRREVOCABLY DESIGNATES, APPOINTS AND EMPOWERS
DURANGO PAPER COMPANY WITH OFFICES ON THE DATE HEREOF AT 1000 OSBORNE STREET,
ST. MARYS, GEORGIA 31558, ATTENTION: HERB BAEZ, AS ITS DESIGNEE, APPOINTEE AND
AGENT TO RECEIVE, ACCEPT AND ACKNOWLEDGE FOR AND ON ITS BEHALF, AND IN RESPECT
OF ITS PROPERTY, SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND
DOCUMENTS WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING. EACH PARTY
COVENANTS AND AGREES THAT IT SHALL TAKE ANY AND ALL REASONABLE ACTION, INCLUDING
THE EXECUTION AND FILING OF ANY AND ALL DOCUMENTS THAT MAY BE NECESSARY TO
CONTINUE ITS FOREGOING DESIGNATION AND APPOINTMENT IN FULL FORCE AND EFFECT AND
TO CAUSE ITS AGENT FOR SERVICE OF PROCESS TO CONTINUE TO ACT IN SUCH CAPACITY.
IF FOR ANY REASON ITS DESIGNEE, APPOINTEE AND AGENT SHALL CEASE TO BE AVAILABLE
TO ACT AS SUCH, EACH PARTY AGREES TO DESIGNATE A NEW DESIGNEE, APPOINTEE AND
AGENT ON THE TERMS AND FOR THE PURPOSES OF THIS PROVISION REASONABLY
SATISFACTORY TO THE OTHER PARTY. NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY
PARTY TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE OTHER PARTY IN ANY OTHER
JURISDICTION.

                                       16
<PAGE>

                  (b) EACH PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREIN.

                  SECTION 8.5. Severability; Partial Invalidity. The invalidity
or unenforceability of any provisions of this Agreement in any jurisdiction
shall not affect the validity, legality or enforceability of the remainder of
this Agreement in such jurisdiction or the validity, legality or enforceability
of this Agreement, including any such provision, in any other jurisdiction, it
being intended that all rights and obligations of the parties hereunder shall be
enforceable to the fullest extent permitted by Law. Wherever possible, each
provision of this Agreement shall be interpreted in a manner as to be effective
and valid under applicable Law, but in case any one or more of the provisions
contained in this Agreement shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, such provision shall be ineffective to
the extent, but only to the extent, of such invalidity, illegality or
unenforceability without invalidating the remainder of such provision or
provisions or any other provisions hereof, unless such a construction would be
unreasonable.

                  SECTION 8.6. Amendments; Waivers.


                  (a) No failure or delay on the part of any Party in exercising
any right, power or privilege hereunder shall operate as a waiver thereof except
as explicitly provided herein, nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege.

                  (b) Any provision of this Agreement may be amended or waived
if, but only if, such amendment or waiver is in writing and is signed, in the
case of an amendment, by each Party, or in the case of a waiver, by the Party
against whom the waiver is to be effective.

                  SECTION 8.7. Counterparts; Facsimile Signatures. This
Agreement may be executed in any number of counterparts, each of which shall be
deemed an original and all of which together shall be one and the same
instrument. This Agreement may be delivered by facsimile and signatures on any
facsimile of this Agreement shall be valid and binding as an original signature.
Each Party agrees that if its signature is delivered by facsimile, an original
signature page of such Party shall subsequently be delivered to the other Party.

                  SECTION 8.8. Assignments and Permitted Transfers.

                  (a) This Agreement shall be binding upon and inure to the
benefit of the Purchaser and the Seller and their respective successors and
permitted assigns.

                  (b) This Agreement may not be assigned by either Party without
the prior written consent of the other Party.

                  SECTION 8.9. Benefits Only to Parties. Nothing expressed by or
mentioned in this Agreement is intended or shall be construed to give any
Person, other than the Parties and their respective successors and assigns, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision herein contained. This Agreement and all conditions and
provisions hereof are intended to be and are for the sole and exclusive benefit
of the Parties and their respective successors and assigns, and are for the
benefit of no other Person.

                            [SIGNATURES ON NEXT PAGE]

                                       17
<PAGE>



                  IN WITNESS WHEREOF, the Seller and the Purchaser have
executed, or caused this Agreement to be duly executed by their respective
authorized officers, as of the day and year first above written.

                                             OPERADORA OMEGA INTERNACIONAL, S.A.
                                             DE C.V.



                                             By: /s/ Martin Rincon
                                                 -------------------------------
                                                 Name: Martin Rincon
                                                 Title: Chief Operating Officer



                                             CORPORACION DURANGO, S.A. DE C.V.



                                             By: /s/ Mayela Rincon de Velasco
                                                 -------------------------------
                                                 Name: Mayela Rincon de Velasco
                                                 Title: Chief Financial Officer


                                       18
<PAGE>


                                                                    SCHEDULE 4.7

                           Subsidiaries of the Company


Durango Georgia Paper Company
Durango Georgia Receivables Company
Durango Georgia Converting Corporation
Durango Georgia Converting, LLC
St. Marys Railroad, LLC



<PAGE>


                                                                         ANNEX A

                           Wire Transfer Instructions


Bank Name:
Account Name:
Account Number:
ABA Number:
Account Holder:
Reference:
Attn: